Edgar Filing: ELEC COMMUNICATIONS CORP

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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:
¨	Preliminary Proxy Statement
¨	Confidential, for the use of the Commission only (as permitted by Rule 14a-6(e)(2))
x	Definitive Proxy Statement
¨	Definitive Additional Materials
¨	Soliciting Material Pursuant to §240.14a-12
______________
eLEC COMMUNICATIONS CORP.
(Name of Registrant as Specified in Its Charter)


(Name(s) of Person Filing Proxy Statement, if Other than Registrant)
______________

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eLEC COMMUNICATIONS CORP.
75 South Broadway, Suite 302
White Plains, New York 10601

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON THURSDAY, JUNE 7, 2007

May 7, 2007

To the shareholders of eLEC Communications Corp.:

Notice is hereby given that the annual meeting of shareholders of eLEC Communications Corp., a New
York corporation, will be held at our executive offices located at 75 South Broadway, White Plains, New York
10601 on Thursday, June 7, 2007 at 10:00 A.M., local time, for the following purposes:

1.		To elect five directors to our board of directors for the fiscal year ending November 30, 2007;

2.		To consider and vote upon a proposal to approve and adopt our 2007 Equity Incentive Plan;

3.		To consider and vote upon a proposal to amend our Certificate of Incorporation to change the
		name of our company from eLEC Communications Corp. to Pervasip Corp.;

4.		To consider and vote upon a proposal to amend our Certificate of Incorporation to increase the
		total number of shares of capital stock that we are authorized to issue to one hundred fifty-one
		million (151,000,000) shares, of which one hundred fifty million (150,000,000) shares shall be
		common stock, par value $.10 per share, and one million (1,000,000) shares shall be preferred
		stock, par value $.10 per share;

5.		To consider and vote upon a proposal to amend our Certificate of Incorporation to change the par
		value of our shares of capital stock from $.10 per share to $.001 per share and reclassify the
		outstanding shares of capital stock into such lower par value shares;

6.		To consider and vote upon a proposal to ratify the appointment of Nussbaum Yates & Wolpow,
		P.C., as our independent registered public accounting firm for the fiscal year ending
		November 30, 2007; and

7.		To consider and act upon such other business as may properly come before the meeting.

The foregoing items of business are more fully described in the proxy statement accompanying this notice.
Our board of directors has fixed the close of business on Monday, April 30, 2007 as the record date for the
determination of shareholders entitled to notice of and to vote at the annual meeting and at any adjournment or
postponement thereof.

Whether or not you plan to attend the annual meeting, you should complete, sign, date and promptly return
the enclosed proxy card, to ensure that your shares will be represented at the meeting. If you attend the annual
meeting and wish to vote in person, you may withdraw your proxy and vote in person. You should not send any
certificates representing stock with your proxy card.

		Sincerely,

		PAUL H. RISS
		Chairman of the Board

eLEC COMMUNICATIONS CORP.
75 South Broadway, Suite 302
White Plains, New York 10601

PROXY STATEMENT

Date, Time and Place of the Annual Meeting

This proxy statement is furnished to the shareholders of eLEC Communications Corp. in connection with
the solicitation, by order of our board of directors, of proxies to be voted at the annual meeting of shareholders to be
held on Thursday, June 7, 2007 at 10:00 A.M., local time, at our executive offices located at 75 South Broadway,
Suite 302, White Plains, New York 10601, and at any adjournment or adjournments thereof. The accompanying
proxy is being solicited on behalf of our board of directors. We intend to release this proxy statement and the
enclosed proxy card to our shareholders on or about Monday, May 7, 2007.

Purpose of the Annual Meeting

At the annual meeting, you will be asked to consider and vote upon the following matters:

1.		To elect five directors to our board of directors for the fiscal year ending November 30, 2007;

2.		To consider and vote upon a proposal to approve and adopt our 2007 Equity Incentive Plan;

3.		To consider and vote upon a proposal to amend our Certificate of Incorporation to change the
		name of our company from eLEC Communications Corp. to Pervasip Corp.;

4.		To consider and vote upon a proposal to amend our Certificate of Incorporation to increase the
		total number of shares of capital stock that we are authorized to issue to one hundred fifty-one
		million (151,000,000) shares, of which one hundred fifty million (150,000,000) shares shall be
		common stock, par value $.10 per share, and one million (1,000,000) shares shall be preferred
		stock, par value $.10 per share;

5.		To consider and vote upon a proposal to amend our Certificate of Incorporation to change the par
		value of our shares of capital stock from $.10 per share to $.001 per share and reclassify the
		outstanding shares of capital stock into such lower par value shares;

6.		To consider and vote upon a proposal to ratify the appointment of Nussbaum Yates & Wolpow,
		P.C., as our independent registered public accounting firm for the fiscal year ending
		November 30, 2007; and

7.		To consider and act upon such other business as may properly come before the meeting.

Voting and Revocation of Proxies; Adjournment

All of our voting securities represented by valid proxies, unless the shareholder otherwise specifies therein

or unless revoked, will be voted FOR each of the director nominees set forth herein, FOR the approval of the

adoption of our 2007 Equity Incentive Plan, FOR the amendment to our Certificate of Incorporation to change our

name, FOR the amendment to our Certificate of Incorporation to increase the total number of shares of capital stock

that we are authorized to issue, FOR the amendment to our Certificate of Incorporation to reduce the par value of our

shares of capital stock, FOR the ratification of Nussbaum Yates & Wolpow, P.C. as our independent auditors and at

the discretion of the proxy holders on any other matters that may properly come before the annual meeting. Our

board of directors does not know of any matters to be considered at the annual meeting other than as set forth herein.

If a shareholder has appropriately specified how a proxy is to be voted, it will be voted accordingly. Any

shareholder has the power to revoke such shareholder’s proxy at any time before it is voted. A shareholder may

revoke a proxy by delivering a written statement to our corporate secretary stating that the proxy is revoked, by

submitting a subsequent proxy signed by the same person who signed the prior proxy, or by voting in person at the

annual meeting.

As of March 31, 2007, we had a total of 22,459,282 shares of common stock outstanding. A plurality of the

votes cast at the annual meeting by the shareholders entitled to vote in the election is required to elect the director

nominees and a majority of the votes cast by the shareholders entitled to vote at the annual meeting is required to

approve the proposed adoption of our 2007 Equity Incentive Plan and to take any other action, including the

amendments to our Certificate of Incorporation and the approval of our independent auditors. For purposes of

determining whether a proposal has received the required vote, abstentions will be included in the vote totals, with

the result being that an abstention will have the same effect as a negative vote. In instances where brokers are

prohibited from exercising discretionary authority for beneficial holders who have not returned a proxy (so-called

"broker non-votes"), those shares will not be included in the vote totals and, therefore, will also have the same effect

as a negative vote. Shares that abstain or for which the authority to vote is withheld on certain matters will, however,

be treated as present for quorum purposes on all matters.

In the event that sufficient votes in favor of any of the matters to come before the meeting are not received

by the date of the annual meeting, the persons named as proxies may propose one or more adjournments of the

annual meeting to permit further solicitation of proxies. Any such adjournment will require the affirmative vote of

the holders of a majority of the shares of common stock present in person or by proxy at the annual meeting. The

persons named as proxies will vote in favor of any such proposed adjournment or adjournments. Under New York

law, shareholders will not have appraisal or similar rights in connection with any proposal set forth in this proxy

statement.

Solicitation

The solicitation of proxies pursuant to this proxy statement will be primarily by mail. In addition, certain of

our directors, officers or other employees may solicit proxies by telephone, telegraph, mail or personal interviews,

and arrangements may be made with banks, brokerage firms and others to forward solicitation material to the

beneficial owners of shares held by them of record. No additional compensation will be paid to our directors,

officers or other employees for such services. We will bear the cost of the solicitation of proxies related to the

annual meeting.

Quorum and Voting Rights

Our board of directors has fixed Monday, April 30, 2007, as the record date for the determination of

shareholders entitled to notice of and to vote at the annual meeting. Holders of record of shares of our common

stock at the close of business on the record date will be entitled to one vote for each share held. The presence, in

person or by proxy, of the holders of a majority of the outstanding voting securities entitled to vote at the annual

meeting is necessary to constitute a quorum at the annual meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

	The following table sets forth, as of April 2, 2007, the names, addresses and number of shares of our
common stock beneficially owned by all persons known to us to be beneficial owners of more than 5% of the
outstanding shares of common stock, and the names and number of shares beneficially owned by all of our directors
and all of our executive officers and directors as a group (except as indicated, each beneficial owner listed exercises
sole voting power and sole dispositive power over the shares beneficially owned). As of April 2, 2007, we had a
total of 22,459,282 shares of common stock outstanding.

		Number of Shares	Percent of Shares
Name and Address		Beneficially Owned	Beneficially Owned

Paul H. Riss		2,302,000⁽¹⁾	10.1%
eLEC Communications Corp.
75 South Broadway, Suite 302
White Plains, New York 10601

Michael H. Khalilian
478 E. Altamonte Drive, Suite 108-480		800,000⁽²⁾	3.5%
Altamonte Springs, Florida 32701

Mark Richards		660,000⁽³⁾	2.9%
610 Sycamore Street, Suite 120
Celebration, Florida 34747

S. Miller Williams		500,000	2.2%
PO Box 15055
Asheville, NC 28813
Greg M. Cooper		125,000⁽⁴⁾	*
Cooper, Niemann & Co., CPAs, LLP
PO Box 190
Mongaup Valley, New York 12762

		53,300⁽⁵⁾	*
Gayle Greer
75 South Broadway, Suite 302
White Plains, New York 10601

All directors and executive officers		4,440,300	18.4%


as a group (six individuals)

* Less than 1%.

(1)	Includes 350,000 shares of common stock subject to options that are presently exercisable or exercisable within
	60 days after April 2, 2007.

(2)	Includes 675,000 shares of common stock subject to options that are presently exercisable or exercisable within
	60 days after April 2, 2007.

(3)	Includes 550,000 shares of common stock subject to options that are presently exercisable or exercisable within
	60 days after April 2, 2007.



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(4)	Includes 85,000 shares of common stock subject to options that are presently exercisable or exercisable within
	60 days after April 2, 2007.

(5)	Includes 50,000 shares of common stock subject to options that are presently exercisable or exercisable within
	60 days after April 2, 2007.


ELECTION OF DIRECTORS
(Proxy Item 1)

	Our amended and restated by-laws provide that the number of our directors shall be at least three, except
that when all the shares are owned beneficially and of record by fewer than three shareholders, the number of
directors may be less than three but not less than the number of shareholders. Subject to the foregoing limitation,
such number may be fixed from time to time by action of our board of directors or of the shareholders, or, if the
number of directors is not so fixed, the number shall be five. In May 2007, our board of directors fixed the number
of directors at six. The board currently consists of five members, and all of those members are standing for re-
election. The term of office of the directors is one year, expiring on the date of the next annual meeting, or when
their respective successors shall have been elected and shall qualify, or upon their prior death, resignation or
removal.

	Except where the authority to do so has been withheld, it is intended that the persons named in the enclosed
proxy will vote for the election of the nominees to our board of directors listed below to serve until the date of the
next annual meeting and until their successors are duly elected and qualified. Although our directors have no reason
to believe that the nominees will be unable or decline to serve, in the event that such a contingency should arise, the
accompanying proxy will be voted for a substitute (or substitutes) designated by our board of directors.

Directors and Officers

	The following table sets forth certain information regarding our director nominees, as furnished by the
nominees as of March 31, 2007. All of the following individuals currently serve as directors of our company.

		Age	Principal Occupation for Past Five Years and
Name			Current Public Directorships or Trusteeships

Paul H. Riss		51	Director since 1995; Chairman of our board of directors since March 2005; our
			Chief Executive Officer since August 1999 and our Chief Financial Officer and
			Treasurer since November 1996.

Greg M. Cooper		47	Director since April 2004; partner for more than five years of Cooper, Niemann
			& Co., CPAs, LLP, certified public accountants; member of the board of
			directors of Mid Hudson Cooperative Insurance Company in Montgomery, New
York, a privately-held insurance company.

Gayle Greer		65	Director since January 2005; Ms. Greer retired in 1998 from Time Warner
			Entertainment after serving over 20 years in a number of executive positions,
			including most recently Senior Vice President of Time Warner Cable; co-
			founder of GS2.Net, a business service provider, and served as its Chairwoman
			from 1999 to April 2001; co-founder of the National Association of Minorities
			in Cable and Telecommunications and served as its Chairwoman from 1981 to
			1985; director of ING North America Financial Services Company, an insurance
and financial services company, since 1997.

Michael H. Khalilian		43	Director and our Chief Technology Officer since October 2004; Chief
			Technology Officer of VoX Communications Corp., our wholly-owned
			subsidiary, since October 2004; Chairman of the Board of Directors and


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		President of IMS Forum, an industry association dedicated to applications
		delivery for IP Multimedia Subsystem architecture, of which Mr. Khalilian was
		a founding member, since July 2001; Chief Technology Officer and director of
		Volo Communications Inc., a wholesale VoIP service provider, from January
		2003 to July 2004; Chief Technologist and advisor for the Telecom Business
		Groups at NTT from January 2002 to June 2003; Senior Engineer and Senior
		Director for the Cable, Communications and Telecom business groups at Time
		Warner Communications from March 1996 to May 2002.

S. Miller Williams	54	Director since April 17, 2007. He was Executive Vice President of Strategic
		Development of Vartec Telecom, Inc., an international consumer
		telecommunications services company, from August 2002 until May 2004, and
		was appointed interim Chief Financial Officer of Vartec in November 2003.
		From 2000 to August 2003, Mr. Williams served as Executive Chairman of the
		Board of PowerTel, Inc., a public company which provided telecommunications
		services in Australia. From 1991 to 2002, he served in various executive
		positions with Williams Communications Group, a subsidiary of The Williams
		Companies, that provided global network and broadband media services, most
		recently as Senior Vice President Corporate Development and General Manager
		International. He was President and owner of MediaTech, Incorporated, a
		manufacturer and dealer of computer tape and supplies, from 1987 until the
		company was sold in 1992. Mr. Williams has served on the Board of Directors
		of Willbros Group, Inc. since May 2004.

Vote Required

Assuming a quorum is present, a plurality of the votes cast at the annual meeting of shareholders by the
shareholders entitled to vote in the election, either in person or by proxy, is required to elect the director nominees.

Our board of directors recommends a vote FOR election of each of the nominees listed above.


DIRECTORS AND OFFICERS

Biographical information concerning our directors and officers is set forth above under the caption
“Election of Directors – Directors and Officers”.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our
directors and executive officers, and persons who own more than ten percent of a registered class of our equity
securities (“10% Shareholders”), to file with the Securities and Exchange Commission (the “Commission”) initial
reports of ownership and reports of changes in ownership of our common stock and other equity securities. Officers,
directors and 10% Shareholders are required by Commission regulation to furnish us with copies of all Section 16(a)
forms they file.

Based solely on our review of the copies of such reports received by us, we believe that for the fiscal year
ended November 30, 2006, all Section 16(a) filing requirements applicable to our officers, directors and 10%
shareholders were complied with.

Board Meetings and Committees; Management Matters

Our board of directors held six meetings during the fiscal year ended November 30, 2006. Each director
(with the exception of Mr. Williams, who was elected to the board of directors in April 2007 to fill a vacancy,



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consistent with our amended and restated by-laws) attended at least 75% of the board of directors and committee

meetings of which he was a member during such time as he served as a director. We do not have a formal policy

regarding attendance by members of our board of directors at the annual meeting of shareholders, but we strongly

encourage all members of our board of directors to attend the annual meeting of shareholders, and expect such

attendance except in the event of exigent circumstances. However, to minimize travel costs, we have asked our out-

of-state directors to attend the June 7, 2007 meeting telephonically rather than in person.

We did not hold an annual meeting of shareholders in 2006. All of the members of our board of directors at

the time of the 2005 annual meeting of shareholders were in attendance at the 2005 annual meeting of shareholders

held on June 15, 2005. From time to time, the members of our board of directors act by unanimous written consent

pursuant to the laws of the State of New York. No fees are paid to directors for attendance at meetings of the board

of directors.

Our board of directors has a stock option committee, which did not meet separately from the full board of

directors during the fiscal year ended November 30, 2006. The stock option committee, which currently consists of

Greg M. Cooper and Gayle Greer, has authority to grant options to our executive officers under our 2007 Equity

Incentive Plan. In October 1997, our board of directors established an audit committee, which met four times during

the fiscal year ended November 30, 2006. Our board of directors does not have a standing nominating committee or

any committee performing similar functions. Our entire board of directors is responsible for these functions.

Compensation Committee

We have a compensation committee currently composed of Greg M. Cooper and Gayle Greer. The

compensation committee establishes remuneration levels for our executive officers. The compensation committee

met once during the fiscal year ended November 30, 2006.

Nominating Committee

Our board of directors does not have a nominating committee. Our entire board of directors is responsible

for this function. Due to the relatively small size of our company and the resulting efficiency of a board of directors

that is also limited in size, our board of directors has determined that it is not necessary or appropriate at this time to

establish a separate nominating committee. Our board of directors intends to review periodically whether such a

nominating committee should be established.

Our board of directors uses a variety of methods for identifying and evaluating nominees for director. It

regularly assesses the appropriate size of the board of directors, and whether any vacancies exist or are expected due

to retirement or otherwise. If vacancies exist, are anticipated or otherwise arise, our board of directors considers

various potential candidates for director. Candidates may come to their attention through current members of our

board of directors, shareholders or other persons. These candidates are evaluated at regular or special meetings of

our board of directors, and may be considered at any point during the year. Our board of directors will consider

candidates for director that are nominated by shareholders in accordance with the procedures regarding the inclusion

of shareholder proposals in proxy materials set forth in the section entitled “Shareholder Proposals” in this proxy

statement. In evaluating such recommendations, our board of directors uses the qualifications and standards

discussed below and seeks to achieve a balance of knowledge, experience and capability on our board of directors.

Qualifications for consideration as a director nominee may vary according to the particular areas of expertise

that may be desired in order to complement the qualifications that already exist among our board of directors.

Among the factors that our directors consider when evaluating proposed nominees are their independence, financial

literacy, business experience, character, judgment and strategic vision. Other considerations would be their

knowledge of issues affecting our business, their leadership experience and their time available for meetings and

consultation on company matters. Our directors seek a diverse group of candidates who possess the background

skills and expertise to make a significant contribution to our board of directors, our company and our shareholders.

Audit Committee

We have an audit committee that, during the fiscal year ended November 30, 2006, was composed of Greg

M. Cooper and Gayle Greer. On April 2, 2007 S. Miller Williams was elected to serve on the audit committee effective as of

April 17, 2007. Each audit committee member is an independent director as defined by the rules of the National Association

of Securities Dealers. The audit committee is governed by a written charter approved by our board of directors and attached to

this proxy statement as Annex A.

Our board of directors has determined that Greg M. Cooper qualifies as an “audit committee financial

expert,” as defined under the rules of the Commission adopted pursuant to the Sarbanes-Oxley Act of 2002. Our

board of directors has determined that Ms. Greer and Mr. Williams are financially literate and experienced in

business matters and fully qualified to monitor the performance of management, the public disclosures by our

company of our financial condition and performance, our internal accounting operations, and our independent

auditors.

Report of the Audit Committee

The audit committee reviews our financial reporting process on behalf of our board of directors.

Management has the primary responsibility for the financial statements and the reporting process, including the

system of internal controls. The independent registered public accounting firm is responsible for performing an

independent audit of the consolidated financial statements to ensure that those statements were prepared in

accordance with the standards of the Public Company Accounting Oversite Board (“PCAOB”) and report thereon to

our board of directors. The audit committee reviews and monitors these processes.

Within this framework, the audit committee has reviewed and discussed the audited financial statements

with management and the independent registered public accounting firm. Management has affirmed to the audit

committee that our consolidated financial statements were prepared in accordance with the standards of the PCAOB.

The audit committee has discussed with the independent registered public accounting firm those matters required to

be discussed by Statement of Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU § 380).

In addition, the audit committee has received the written disclosures and the letter from the independent

registered public accounting firm required by Independence Standards Board Standard No. 1 (Independent Standards

Board Standard No. 1, Independence Discussions with Audit Committees), and has also discussed with the

independent registered public accounting firm, their independence from management and our company. In

connection with the new standards for independence of our independent registered public accounting firm

promulgated by the Commission, the audit committee has undertaken to consider whether the provision of any non-

audit services (such as internal audit assistance and tax-related services) by our independent registered public

accounting firm is compatible with maintaining their independence when the independent registered public

accounting firm is also engaged to provide non-audit services.

The audit committee also discussed with our independent registered public accounting firm the overall

scope and plans for its audit, its evaluation of our internal controls and the overall quality of our financial reporting.

In reliance on the reviews and discussions referred to above, the audit committee has recommended to the

board of directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K

for the year ended November 30, 2006, which was filed with the Commission on March 8, 2007.

Audit Committee

Greg M. Cooper, Member

Gayle Greer, Member

Shareholder Communications

Our board of directors has implemented a process for our shareholders to send communications to our

board of directors. Any shareholder desiring to communicate with our board of directors, or with specific individual

directors, may do so by writing to Mr. Eric M. Hellige, Corporate Secretary, at eLEC Communications Corp., 75

South Broadway, Suite 302, White Plains, New York 10601. The Corporate Secretary has the authority to disregard

any inappropriate communications or take other appropriate actions with respect to any such inappropriate

communications. If deemed an appropriate communication, the Corporate Secretary will submit a shareholder’s

correspondence to the Chairman of the Board of Directors or to any specific director to whom the correspondence is

directed.

Code of Ethics

We have adopted a code of business conduct and ethics for our directors, officers and employees, including

our chief executive officer and chief financial officer. In addition, we have adopted a supplemental code of ethics

for our financial executives and all employees in our accounting department. The text of our codes are posted on our

Internet website at www.elec.net.

EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following table sets forth, for the fiscal years indicated, all compensation awarded to, earned by or

paid to Mr. Paul H. Riss, our Chief Executive Officer, Chief Financial Officer and Treasurer, Mr. Michael H.

Khalilian, our Chief Technology Officer, and Mr. Mark Richards, the President of VoX Communications Corp.,

our wholly-owned subsidiary (collectively, the “Named Executives”). None of our other executive officers

received more than $100,000 in compensation during fiscal 2006.

Compensation Table

Long-Term

Annual Compensation

Compensation Awards

Name and

Fiscal

Other Annual

All Other

Principal Position

Year

Salary($)

Bonus($)

Compensation ($)

Options(#)

Compensation

Paul H. Riss

2006

$175,000

None

Chief Executive Officer,

2005

150,000

None

Chief Financial Officer

2004

150,000

None

100,000

None

and Treasurer

Michael H. Khalilian⁽¹⁾

Chief Technology

2006

$125,000

None

Officer since October

2005

120,000

None

26, 2004

2004

12,000

None

900,000

None

Mark Richards⁽²⁾

President of VoX

2006

$125,000

None

Communications Corp.

2005

120,000

None

Subsidiary since

2004

22,569

None

1,000,000

None

October 4, 2004

Stock Option Grants

No grants of stock options or stock appreciation rights (“SARs”) were made during fiscal 2006 to the

Named Executives.

Stock Option Exercises

The following table contains information relating to the exercise of our stock options by the Named

Executives in fiscal 2006, as well as the number and value of their unexercised options as of November 30, 2006.

Aggregated Option Exercises in Last Fiscal Year

and Fiscal Year-End Option Values

Number of Securities Underlying

Value of Unexercised In-the-

Unexercised Options at Fiscal

Money Options at Fiscal Year-

Acquired on

Value

Year-End(#)⁽¹⁾

End ($)⁽²⁾

Name

Exercise (#)

Realized($)

Exercisable

Unexercisable

Exercisable

Unexercisable

Paul H. Riss

350,000

$37,500

Michael Khalilian

675,000

225,000

Mark Richards

550,000

450,000

(1)

The sum of the numbers under the Exercisable and Unexercisable column of this heading represents the Named

Executives’ total outstanding options to purchase shares of common stock.

(2)

The dollar amounts shown under the Exercisable and Unexercisable columns of the heading represent the

number of exercisable and unexercisable options, respectively, that were “In-the-Money” on November 30,

2006, multiplied by the difference between the closing price of our common stock on November 30, 2006,

which was $0.23 per share, and the exercise price of the options. For purposes of these calculations, In-the-

Money options are those with an exercise price below $0.23 per share.

Board of Directors Compensation

We do not currently compensate directors for service on our board of directors. We maintain a Non-

Employee Director Stock Option Plan (the “Director Option Plan”). Under the Director Option Plan, each non-

employee director is granted a non-statutory option to purchase 10,000 shares of our common stock on the date on

which he or she is elected, re-elected or appointed to our board of directors. Options granted pursuant to the

Director Option Plan will vest in full on the one-year anniversary of the grant date, provided the non-employee

director is still our director at that time. The exercise price granted under the Director Option Plan is 100% of the

fair market value per share of the common stock on the date of the grant as reported on The OTC Bulletin Board.

The following table provides information as of April 16, 2007 with respect to shares of our common stock

that are issuable under equity compensation plans.

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

Equity compensation plans approved
by security holders:

1995 Stock Option Plan⁽¹⁾		800,500			$0.28	-
1996 Restricted Stock Plan⁽²⁾				-			400,000

	Subtotal		800,500			400,000

Equity compensation plans not
approved by security holders:

Employee stock options		1,900,000			0.24	-
2004 Equity Incentive Plan⁽³⁾		788,000			0.38	212,000
Laurus Master Fund, Ltd.⁽⁴⁾		7,037,434			0.21	-
Source Capital Group, Inc.⁽⁴⁾		1,347,234			0.36	-
Institutional Marketing Services,		100,000			0.63	-
	Inc. ⁽⁵⁾
Gilford Securities⁽⁶⁾		100,000			0.40
Capital TT, LLC⁽⁶⁾				150,000	0.63		-

	Subtotal			11,422,668			212,000



	Total			12,223,168			612,000


(1)	Options are no longer issuable under our 1995 Stock Option Plan.

(2)	Our 1996 Restricted Stock Plan provides for the issuance of restricted share grants to officers and non-officer
	employees.

(3)	Our 2004 Equity Incentive Plan allows for the granting of share options to members of our board of directors,
	officers, non-officer employees and consultants.

(4)	Warrants were issued in conjunction with financings provided by Laurus Master Fund, Ltd

(5)	Warrants were granted for investor relation services.

(6)	Warrants were issued for consulting services.




11

ADOPTION OF THE eLEC COMMUNICATIONS CORP. 2007 EQUITY INCENTIVE PLAN

(Proxy Item 2)

General

In connection with the July 2005 expiration of our 1995 Stock Option Plan, adopted in 1995 (the “1995

Plan”) and because our board of directors wishes to allow for the possibility of providing incentives to employees

and consultants of our company in excess of the 1,000,000 shares of Common Stock that may be granted pursuant to

our 2004 Equity Incentive Plan (the “2004 Plan”), our board of directors adopted at its meeting on March 30, 2007,

the eLEC Communications Corp. 2007 Equity Incentive Plan (the “2007 Incentive Plan”), a copy of which is

attached to this proxy statement as Annex B. The 2007 Incentive Plan gives us the ability to grant stock options,

SARs and restricted stock (collectively, “Awards”) to employees or consultants of our company or of any subsidiary

of our company and to non-employee members of our advisory board or our board of directors or the board of

directors of any of our subsidiaries. Our board of directors believes that adoption of the 2007 Incentive Plan is in the

best interests of our company and our shareholders because the ability to grant stock options and make other stock-

based awards under the 2007 Incentive Plan is an important factor in attracting, stimulating and retaining qualified

and distinguished personnel with proven ability and vision to serve as employees, officers, consultants or members of

the board of directors or advisory board of our company and our subsidiaries, and to chart our course towards continued

growth and financial success. Therefore, our board of directors views the 2007 Incentive Plan as a key component of

our compensation program.

As of March 31, 2007, under the 1995 Plan, no shares of our common stock remained available for future

grants and 810,500 shares of our common stock were allocated to outstanding options. As of March 31, 2007, under

the 2004 Plan, 212,000 shares of our common stock remained available for future grants and 788,000 shares of our

common stock were allocated to outstanding options. The weighted average exercise price of all options, warrants

and rights outstanding as of March 31, 2007 was $0.28 per share.

Summary of the Provisions of the 2007 Incentive Plan

The following summary briefly describes the material features of the 2007 Incentive Plan and is qualified,

in its entirety, by the specific language of the 2007 Incentive Plan, a copy of which is attached to this proxy

statement as Annex B.

Shares Available

Our board of directors has authorized, subject to shareholder approval, 2,000,000 shares of our common

stock for issuance under the 2007 Incentive Plan. In the event of any stock dividend, stock split, reverse stock split,

share combination, recapitalization, merger, consolidation, spin-off, split-up, reorganization, rights offering,

liquidation, or any similar change event of or by our company, appropriate adjustments will be made to the shares

subject to the 2007 Incentive Plan and to any outstanding Awards. Shares available for Awards under the 2007

Incentive Plan may be either newly-issued shares or treasury shares.

In certain circumstances, shares subject to an outstanding Award may again become available for issuance

pursuant to other Awards available under the 2007 Incentive Plan. For example, shares subject to forfeited,

terminated, canceled or expired Awards will again become available for future grants under the 2007 Incentive Plan.

In addition, shares subject to an Award that are withheld by us to satisfy tax withholding obligations shall also be

made available for future grants under the 2007 Incentive Plan.

Administration

The 2007 Incentive Plan is administered by the stock option committee of our board of directors or such

other committee as may be appointed by our board of directors to administer the 2007 Incentive Plan or if such a

committee is not appointed or unable to act, then our entire board of directors (the “Committee”). The Committee

will consist of at least two members who are non-employee directors within the meaning of Rule 16b-3 under the

Exchange Act. With respect to the participation of individuals who are subject to Section 16 of the Exchange Act,

the 2007 Incentive Plan is administered in compliance with the requirements of Rule 16b-3 under the Exchange Act.

Subject to the provisions of the 2007 Incentive Plan, the Committee determines the persons to whom grants of

options, SARs and shares of restricted stock are to be made, the number of shares of common stock to be covered by

each grant and all other terms and conditions of the grant. If an option is granted, the Committee determines whether

the option is an incentive stock option or a nonstatutory stock option, the option’s term, vesting and exercisability,

the amount and type of consideration to be paid to our company upon the option’s exercise and the other terms and

conditions of the grant. The terms and conditions of restricted stock and SAR Awards are also determined by the

Committee. The Committee has the responsibility to interpret the 2007 Incentive Plan and to make determinations

with respect to all Awards granted under the 2007 Incentive Plan. All determinations of the Committee are final and

binding on all persons having an interest in the 2007 Incentive Plan or in any Award made under the 2007 Incentive

Plan. The costs and expenses of administering the 2007 Incentive Plan are borne by our company.

Eligibility

Eligible individuals include our and our subsidiaries’ employees (including our and our subsidiaries’

officers and directors who are also employees) or consultants whose efforts, in the judgment of the Committee, are

deemed worthy of encouragement to promote our growth and success. Non-employee directors of our board of

directors are also eligible to participate in the 2007 Incentive Plan. All eligible individuals may receive one or more

Awards under the Plan, upon the terms and conditions set forth in the 2007 Incentive Plan. Currently, approximately

40 individuals are eligible to receive Awards under the 2007 Incentive Plan. Of this total, approximately 35

individuals are employees and three individuals are non-employee directors. At this time, there are three individuals

who are consultants that are eligible to receive Awards under the 2007 Incentive Plan. There is no assurance that an

otherwise eligible individual will be selected by the Committee to receive an Award under the 2007 Incentive Plan.

Because future Awards under the 2007 Incentive Plan will be granted in the discretion of the Committee,

the type, number, recipients and other terms of such Awards cannot be determined at this time. Information

regarding our recent practices with respect to annual, long-term and stock-based compensation under other plans and

stock options under such plans is presented above in this proxy statement. See “Executive Compensation” herein

and note 15 to our financial statements for the year ended November 30, 2006 in our Annual Report on Form 10-K

that accompanies this proxy statement.

Stock Options and SARs

Under the 2007 Incentive Plan, the Committee is authorized to grant both stock options and SARs. Stock

options may be either designated as non-qualified stock options or incentive stock options. Incentive stock options,

which are intended to meet the requirements of Section 422 of the Internal Revenue Code such that a participant can

receive potentially favorable tax treatment, may only be granted to employees. Therefore, any stock option granted

to consultants and non-employee directors are non-qualified stock options. The tax treatment of incentive and non-

qualified stock options is generally described later in this summary. SARs may be granted either alone or in tandem

with a stock option. A SAR entitles the participant to receive the excess, if any, of the fair market value of a share on

the exercise date over the strike price of the SAR. This amount is payable in cash, except that the Committee may

provide in an Award agreement that benefits may be paid in shares of our common stock. In general, if a SAR is

granted in tandem with an option, the exercise of the option will cancel the SAR, and the exercise of the SAR will

cancel the option. Any shares that are canceled will be made available for future Awards. The Committee, in its

sole discretion, determines the terms and conditions of each stock option and SAR granted under the 2007 Incentive

Plan, including the grant date, option or strike price (which, in no event, will be less than the par value of a share),

whether a SAR is paid in cash or shares, the term of each option or SAR, exercise conditions and restrictions,

conditions of forfeitures, and any other terms, conditions and restrictions consistent with the terms of the 2007

Incentive Plan, all of which will be evidenced in an individual Award agreement between us and the participant.

Certain limitations apply to incentive stock options and SARs granted in tandem with incentive stock

options. The per share exercise price of an incentive stock option may not be less than 100% of the fair market value

of a share of our common stock on the date of the option’s grant and the term of any such option shall expire not

later than the tenth anniversary of the date of the option’s grant. In addition, the per share exercise price of any

option granted to a person who, at the time of the grant, owns stock possessing more than 10% of the total combined

voting power or value of all classes of our stock must be at least 110% of the fair market value of a share of our

common stock on the date of grant and such option shall expire not later than the fifth anniversary of the date of the

option’s grant.

Options and SARs granted under the 2007 Incentive Plan become exercisable at such times as may be

specified by the Committee. In general, options and SARs granted to participants become exercisable in three equal

annual installments, subject to the optionee’s continued employment or service with us. However, the aggregate

value (determined as of the grant date) of the shares subject to incentive stock options that may become exercisable

by a participant in any year may not exceed $100,000. If a SAR is granted in tandem with an option, the SAR will

become exercisable at the same time or times as the option becomes exercisable.

The maximum term of options and SARs granted under the 2007 Incentive Plan is ten years. If any

participant terminates employment due to death or disability or retirement, the portion of his or her option or SAR

Awards that were exercisable at the time of such termination may be exercised for one year from the date of

termination. In the case of any other termination, the portion of his or her option or SAR Awards that were

exercisable at the time of such termination may be exercised for three months from the date of termination.

However, if the remainder of the option or SAR term is shorter than the applicable post-termination exercise period,

the participant’s rights to exercise the option or SAR will expire at the end of the term. In addition, if a participant’s

service terminates due to cause, all rights under an option or SAR will immediately expire, including rights to the

exercisable portion of the option or SAR. Shares attributable to an option or SAR that expire without being

exercised will be forfeited by the participant and will again be available for Award under the 2007 Incentive Plan.

Unless limited by the Committee in an Award agreement, payment for shares purchased pursuant to an

option exercise may be made (i) in cash, check or wire transfer, (ii) subject to the Committee’s approval, in shares

already owned by the participant (including restricted shares held by the participant at least six months prior to the

exercise of the option) valued at their fair market value on the date of exercise, or (iii) through broker-assisted

cashless exercise procedures.

Restricted Stock

Under the 2007 Incentive Plan, the Committee is also authorized to make Awards of restricted stock. A

restricted stock Award entitles the participant to all of the rights of a shareholder of our company, including the right

to vote the shares and the right to receive any dividends. However, the Committee may require the payment of cash

dividends to be deferred and if the Committee so determines, re-invested in additional shares of restricted stock.

Before the end of a restricted period and/or lapse of other restrictions established by the Committee, shares received

as restricted stock shall contain a legend restricting their transfer, and may be forfeited (i) in the event of termination

of employment, (ii) if our company or the participant does not achieve specified performance goals after the grant

date and before the participant’s termination of employment or (iii) upon the failure to achieve other conditions set

forth in the Award agreement.

An Award of restricted stock will be evidenced by a written agreement between us and the participant. The

Award agreement will specify the number of shares of our common stock subject to the Award, the nature and/or

length of the restrictions, the conditions that will result in the automatic and complete forfeiture of the shares and the

time and manner in which the restrictions will lapse, subject to the Award holder’s continued employment by us, and

any other terms and conditions the Committee shall impose consistent with the provisions of the 2007 Incentive Plan.

The Committee also determines the amount, if any, that the participant shall pay for the shares of restricted stock.

However, the participant must be required to pay at least the par value for each share of restricted stock. Upon the

lapse of the restrictions, any legends on the shares of our common stock subject to the Award will be re-issued to the

participant without such legend.

Unless the Committee determines otherwise in the Award or other agreement, if a participant terminates

employment for any reason, all rights to restricted stock that are then forfeitable will be forfeited. Restricted stock

that is forfeited by the participant will again be available for Award under the 2007 Incentive Plan.

Fair Market Value

Under the 2007 Incentive Plan, fair market value means the fair market value of the shares based upon the

closing selling price of a share of our common stock as quoted on any national securities exchange or the OTC

Bulletin Board on the relevant date. If there is no closing selling price on the relevant date, then the fair market

value shall mean the closing selling price on the last preceding date for which such quotation exists. If shares are not

readily tradable on a national securities exchange or other market system, fair market value means an amount

determined in good faith by the Committee to be the fair market value of the shares.

Transferability Restrictions

Generally and unless otherwise provided in an Award agreement, shares or rights subject to an Award

cannot be assigned or transferred other than by will or by the laws of descent and distribution and Awards may be

exercised during the participant’s lifetime only by the participant or his or her guardian or legal representative.

However, a participant may, if permitted by the Committee, in its sole discretion, transfer an Award, or any portion

thereof, to one or more of the participant’s spouse, children or grandchildren, or may designate in writing a

beneficiary to exercise an Award after his or her death.

Termination or Amendment of the 2007 Incentive Plan

Unless sooner terminated, no Awards may be granted under the 2007 Incentive Plan after April 2, 2017.

Our board of directors may amend or terminate the 2007 Incentive Plan at any time, but our board of directors may

not, without shareholder approval, amend the 2007 Incentive Plan to increase the total number of shares of our

common stock reserved for issuance of Awards. In addition, any amendment or modification of the 2007 Incentive

Plan shall be subject to shareholder approval as required by any securities exchange on which our common stock is

listed. No amendment or termination may deprive any participant of any rights under Awards previously made under

the 2007 Incentive Plan.

Summary of Federal Income Tax Consequences of the 2007 Incentive Plan

The following summary is intended only as a general guide as to the federal income tax consequences under

current law with respect to participation in the 2007 Incentive Plan and does not attempt to describe all possible

federal or other tax consequences of such participation. Furthermore, the tax consequences of awards made under

the 2007 Incentive Plan are complex and subject to change, and a taxpayer’s particular situation may be such that

some variation of the described rules is applicable.

Options and SARs

There are three points in time when a participant and our company could potentially incur federal income

tax consequences: date of grant, upon exercise and upon disposition. First, when an option or a SAR is granted to a

participant, the participant does not recognize any income for federal income tax purposes on the date of grant. We

similarly do not have any federal income tax consequences at the date of grant. Second, depending upon the type of

option, the exercise of an option may or may not result in the recognition of income for federal income tax purposes.

With respect to an incentive stock option, a participant will not recognize any ordinary income upon the option’s

exercise (except that the alternative minimum tax may apply). However, a participant will generally recognize

ordinary income upon the exercise of a non-qualified stock option. In this case, the participant will recognize

income equal to the difference between the option price and the fair market value of shares purchased pursuant to the

option on the date of exercise. With respect to the exercise of a SAR, the participant must generally recognize

ordinary income equal to the cash received (or, if applicable, value of the shares received).

Incentive stock options are subject to certain holding requirements before a participant can dispose of the

shares purchased pursuant to the exercise of the option and receive capital gains treatment on any income realized

from the exercise of the option. Satisfaction of the holding periods determines the tax treatment of any income

realized upon exercise. If a participant disposes of shares acquired upon exercise of an incentive stock option before

the end of the applicable holding periods (called a “disqualifying disposition”), the participant must generally

recognize ordinary income equal to the lesser of (i) the fair market value of the shares at the date of exercise of the

incentive stock option minus the exercise price or (ii) the amount realized upon the disposition of the shares minus

the exercise price. Any excess of the fair market value on the date of such disposition over the fair market value on

the date of exercise must be recognized as capital gains by the participant. If a participant disposes of shares

acquired upon the exercise of an incentive stock option after the applicable holding periods have expired, such

disposition generally will result in long-term capital gain or loss measured by the difference between the sale price

and the participant’s tax “basis” in such shares (generally, in such case, the tax “basis” is the exercise price).

Generally, we will be entitled to a tax deduction in an amount equal to the amount recognized as ordinary

income by the participant in connection with the exercise of options and SARs. However, we are generally not

entitled to a tax deduction relating to amounts that represent capital gains to a participant. Accordingly, if the

participant satisfies the requisite holding period with respect to an incentive stock option before disposition to

receive the favorable tax treatment accorded incentive stock options, we will not be entitled to any tax deduction

with respect to an incentive stock option. In the event the participant has a disqualifying disposition with respect to

an incentive stock option, we will be entitled to a tax deduction in an amount equal to the amount that the participant

recognized as ordinary income.

Restricted Stock Awards

A participant will not be required to recognize any income for federal income tax purposes upon the grant

of shares of restricted stock. With respect to Awards involving shares or other property, such as restricted stock

Awards, that contain restrictions as to their transferability and are subject to a substantial risk of forfeiture, the

participant must generally recognize ordinary income equal to the fair market value of the shares or other property

received at the time the shares or other property become transferable or are no longer subject to a substantial risk of

forfeiture, whichever occurs first. We generally will be entitled to a deduction in an amount equal to the ordinary

income recognized by the participant. A participant may elect to be taxed at the time he or she receives shares (e.g.,

restricted stock) or other property rather than upon the lapse of transferability restrictions or the substantial risk of

forfeiture. However, if the participant subsequently forfeits such shares he or she would not be entitled to any tax

deduction or, to recognize a loss, for the value of the shares or property on which he or she previously paid tax.

Alternatively, if an Award that results in a transfer to the participant of cash, shares or other property does not

contain any restrictions as to their transferability and is not subject to a substantial risk of forfeiture, the participant

must generally recognize ordinary income equal to the cash or the fair market value of shares or other property

actually received. We generally will be entitled to a deduction for the same amount.

Vote Required

Assuming a quorum is present, the affirmative vote of a majority of the votes cast at the annual meeting of

shareholders, either in person or by proxy, is required for approval of this proposal.

Our board of directors recommends a vote FOR approval of the proposed adoption of our 2007 Equity

Incentive Plan.

PROPOSAL TO AMEND OUR CERTIFICATE OF

INCORPORATION TO CHANGE OUR CORPORATE NAME

(Proxy Item 3)

On September 26, 2006, our board of directors adopted, subject to shareholder approval, a resolution to

amend Article FIRST of our Certificate of Incorporation to change our corporate name from eLEC Communications

Corp. to Pervasip Corp. In the judgment of our board of directors, the change of our corporate name is desirable

because the focus of our business has evolved to telephony services and other applications over IP networks rather

than local exchange carrier services. We believe we have a significant technological advantage in our IP platform,

and the ubiquitous nature of the Internet allows our services to be available everywhere there is broadband.

We have selected the name “Pervasip” to signify pervasive IP services. Unlike other words in the IP sector

that are generic in nature and used by several carriers, we believe we can obtain trademark protection for the name

Pervasip, which we created. Furthermore, in the telephone industry, the letters “LEC” in our name are known to

stand for “local exchange carrier.” While the name eLEC would signify a local exchange carrier that utilizes the

Internet to provide services, there is still a close tie to traditional wireline services in any company that is considered

a LEC. Given that we plan to sell our local exchange carrier subsidiaries, we believe that retaining the letters “LEC”

in our name would not be appropriate.

Text of Proposed Amendment

Article FIRST of our Certificate of Incorporation is proposed to be amended to read as follows:

“FIRST: That the name of the corporation is Pervasip Corp. (the “Corporation”).”

If the proposed amendment is adopted, shareholders will not be required to exchange outstanding stock

certificates for new stock certificates.

Vote Required for Approval

The proposed amendment to our Certificate of Incorporation to change the corporate name of our company

will become effective only upon approval by a majority of the votes cast by the shareholders entitled to vote at the

annual meeting and the filing of a Certificate of Amendment to our Certificate of Incorporation with the Secretary of

the State of New York, which filing is expected to take place shortly after the annual meeting. If this proposed

amendment is not approved by the shareholders, then the Certificate of Amendment will not be filed.

Our board of directors recommends that the shareholders vote FOR adoption of the proposed amendment to

our Certificate of Incorporation.

PROPOSAL TO AMEND OUR CERTIFICATE OF INCORPORATION

TO INCREASE AUTHORIZED SHARES OF COMMON STOCK

(Proxy Item 4)

Our board of directors has proposed an amendment to Article FOURTH of our Certificate of Incorporation.

This amendment would increase the total number of shares of capital stock that we are authorized to issue to one

hundred fifty-one million (151,000,000), of which one hundred-fifty million (150,000,000) shall be common stock,

par value $.10 per share, and one million (1,000,000) shall be preferred stock, par value $.10 per share. The par

value of the common stock, currently $.10 per share, will be reduced to $.001 per share if the proposed amendment

to our Certificate of Incorporation to effectuate such a reduction in par value (Proxy Item 5) is approved at the

annual meeting. No increase in the authorized number of shares of preferred stock is requested.

We have no specific plans for the issuance of additional shares of common stock. However, the board of

directors believes that the proposed increase is desirable so that, as the need may arise, we will have more financial

flexibility and be able to issue additional shares of common stock without the expense and delay associated with a

special shareholders’ meeting, except where shareholder approval is required by applicable law or stock exchange

regulations. The additional shares of common stock might be used, for example, in connection with an expansion of

our business through investments or acquisitions, sold in a financing transaction or issued under an employee stock

option, savings or other benefit plan or in a stock split or dividend to shareholders. The board of directors does not

intend to issue any shares except on terms that it considers to be in the best interests of the company and its

shareholders.

The additional shares of common stock for which authorization is sought would be a part of the existing

class of common stock. If and when issued, these shares would have the same rights and privileges as the shares of

common stock presently outstanding. No holder of common stock has any preemptive rights to acquire additional

shares of the common stock.

The issuance of additional shares could reduce existing shareholders’ percentage ownership and voting

power in our company and, depending on the transaction in which they are issued, could affect the per share book

value or other per share financial measures.

Although the proposed amendment is not intended to be an anti-takeover measure, shareholders should note

that, under certain circumstances, the additional shares of common stock could be used to make any attempt to gain

control of our company or the board of directors more difficult or time-consuming. Any of the additional shares of

common stock could be privately placed with purchasers who might side with the board of directors in opposing a

hostile takeover bid. It is possible that such shares could be sold with or without an option, on our part, to

repurchase such shares, or on the part of the purchaser, to put such shares to us.

The amendment to increase the authorized shares of common stock might be considered to have the effect

of discouraging an attempt by another person or entity, through the acquisition of a substantial number of shares of

our capital stock, to acquire control of us, since the issuance of the additional shares of common stock could be used

to dilute the stock ownership of a person or entity seeking to obtain control and to increase the cost to a person or

entity seeking to acquire a majority of the voting power of our company. If so used, the effect of the additional

authorized shares of common stock might be (i) to deprive shareholders of an opportunity to sell their stock at a

temporarily higher price as a result of a tender offer or the purchase of shares by a person or entity seeking to obtain

control of us or (ii) to assist incumbent management in retaining its present position.

Text of Proposed Amendment

The first paragraph of Article FOURTH of our Certificate of Incorporation is proposed to be amended to

read as follows:

“FOURTH: A. Authorized Shares. The total number of shares of all classes of capital stock which the Company

shall have the authority to issue is one hundred fifty-one million (151,000,000), of which one hundred-fifty million

(150,000,000) shall be common stock, par value $.10 per share and one million (1,000,000) shall be preferred stock,

par value $.10 per share.”

If the proposal to reduce the par value of our shares of capital stock (Proxy Item 5) is approved by our

shareholders at the annual meeting, the references to the par value of our common stock and our preferred stock in

the foregoing Article FOURTH of our Certificate of Incorporation shall be $.001 per share rather than $.10 per

share.

A copy of the foregoing proposed amendment, including the proposed amendment to reduce the par value

of our common stock and our preferred stock from $.10 per share to $.001 per share, is attached to this proxy

statement as Annex C and is marked to show changes from our current Certificate of Incorporation.

Vote Required for Approval

The proposed amendment to the Certificate of Incorporation to increase the total number of shares of

capital stock that we are authorized to issue will become effective only upon approval by a majority of the votes cast

by the shareholders entitled to vote at the annual meeting and the filing of a Certificate of Amendment to the

Certificate of Incorporation with the Secretary of the State of New York, which filing is expected to take place

shortly after the annual meeting. If this proposed amendment is not approved by the shareholders, then the language

pertaining to this Proxy Item 4 will not be included in the Certificate of Amendment filed with the Secretary of the

State of New York.

Our board of directors recommends that the shareholders vote FOR adoption of the proposed amendment to

our Certificate of Incorporation.

PROPOSAL TO AMEND OUR CERTIFICATE OF INCORPORATION TO CHANGE THE PAR VALUE

OF OUR SHARES OF CAPITAL STOCK FROM $.10 PER SHARE TO $.001 PER SHARE;

(Proxy Item 5)

Our board of directors has proposed an amendment to Article FOURTH of our Certificate of Incorporation.

This amendment would reduce the par value of our common stock and our preferred stock from $.10 per share to

$.001 per share and reclassify the outstanding shares of capital stock into such lower par value shares.

Our Certificate of Incorporation currently authorizes the issuance of shares of common stock with a par

value of $.10 per share. The board of directors believes it is in the best interests of our company to amend our

Certificate of Incorporation to reduce the par value of our capital stock to $.001 per share. The proposed reduction

in par value is intended to bring us into line with the practice of other public companies with respect to par value.

Historically, the concept of par value served to protect creditors and senior security holders by ensuring that

a company received at least the par value as consideration for issuance of stock. Over time, the concept of par value

has lost much of its significance. Today many companies incorporate using a nominal par value or have no par value

at all.

The reduction in the par value would not change the number of authorized shares of our common stock or

preferred stock. The reduction in the par value would reduce the amount required to be carried by us as capital,

thereby potentially increasing our surplus capital available for dividends and other distributions and for other

corporate purposes. The board of directors has not proposed the reduction in the par value with the intention of

declaring dividends on our common stock. The reduction in the par value should have no effect on the rights of the

holders of our capital stock except for the minimum amount per share we may receive upon the issuance of

authorized but unissued shares and added dividend flexibility.

If this proposal is approved, certificates representing shares of our capital stock, $.10 par value per share,

issued and outstanding prior to the effective date of filing of the amendment to our Certificate of Incorporation, will

be changed to represent the same number of shares of common stock, $.001 par value per share, as they did prior to

such effective date. Existing certificates will not be exchanged for new certificates. Please do not return any

certificates to us.

A copy of the proposed amendment, including the proposed amendment pursuant to Proxy Item 4 to

increase the total number of shares of capital stock that we are authorized to issue, is attached to this proxy statement

as Annex C and is marked to show changes from our current Certificate of Incorporation.

Vote Required for Approval

The proposed amendment to our Certificate of Incorporation to reduce the par value of our capital stock

from $.10 per share to $.001 per share and reclassify the outstanding shares of capital stock into such lower par value

shares will become effective only upon approval by a majority of the votes cast by the shareholders entitled to vote at

the annual meeting and the filing of a Certificate of Amendment to the Certificate of Incorporation with the Secretary

of the State of New York, which filing is expected to take place shortly after the annual meeting. If this proposed

amendment is not approved by the shareholders, then the language pertaining to this Proxy Item 5 will not be

included in the Certificate of Amendment filed with the Secretary of the State of New York.

Our board of directors recommends that the shareholders vote FOR adoption of the proposed amendment to

our Certificate of Incorporation.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

(Proxy Item 6)

Nussbaum Yates & Wolpow, P.C. (“Nussbaum”), is serving as our independent registered public

accounting firm for the fiscal year ended November 30, 2006 and has been appointed by our board of directors to

continue as our independent registered public accounting firm for the fiscal year ending November 30, 2007. In the

event that ratification of this appointment of the independent registered public accounting firm is not approved by the

affirmative vote of a majority of votes cast on the matter, the appointment of independent registered public

accounting firm will be reconsidered by our board of directors. Unless marked to the contrary, proxies received will

be voted for ratification of the appointment of Nussbaum as our independent registered public accounting firm for

the fiscal year ending November 30, 2007.

A representative of Nussbaum is expected to attend the annual meeting, and such representative will have

the opportunity to make a statement if he so desires and will be available to respond to appropriate questions from

shareholders.

Your ratification of the appointment of Nussbaum as our independent registered public accounting firm for

the fiscal year ending November 30, 2007 does not preclude our board of directors from terminating its engagement

of Nussbaum and retaining a new independent registered public accounting firm, if it determines that such an action

would be in our best interests.

Audit Fees

Audit Fees

The aggregate fees billed by Nussbaum for professional services rendered for the audit of our annual

financial statements for the last two fiscal years and for the reviews of the financial statements included in our

Quarterly Reports on Form 10-Q during the last two fiscal years was $146,993 and $142,226, respectively.

Audit-Related Fees

We did not engage our principal accountants to provide assurance or related services during the last two

fiscal years.

Tax Fees

The aggregate fees billed by our principal accountants for tax compliance, tax advice and tax planning

services rendered to us during the last two fiscal years was $20,000 and $20,000 respectively.

All Other Fees

We did not engage our principal accountants to render services to us during the last two fiscal years, other

than as reported above.

Pre-Approval Policies and Procedures

Our board of directors has the sole authority to appoint or replace our independent registered public

accounting firm. Our board is directly responsible for the compensation and oversight of the work of our independent

registered public accounting firm (including resolution of disagreements between management and the independent

registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit

report or related work. Our independent registered public accounting firm is engaged by, and reports directly to, our

Board.

Our board of directors pre-approves all auditing services and permitted non-audit services (including the

fees and terms thereof) to be performed for us by our independent auditor, subject to the de minimis exceptions for

non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange Act of 1934, all of which are

approved by our board prior to the completion of the audit. In the event pre-approval for such auditing services and

permitted non-audit services cannot be obtained as a result of inherent time constraints in the matter for which such

services are required, our Chairman of the Board may pre-approve such services, and will report for ratification such

pre-approval to our board of directors at its next scheduled meeting. Our board has complied with the procedures set

forth above and all services reported above were approved in accordance with such procedures.

Vote Required and Board of Directors' Recommendation

Assuming a quorum is present, the affirmative vote of a majority of the votes cast at the annual meeting of

shareholders, by the shareholders entitled to vote at the annual meeting of shareholders, either in person or by proxy,

is required for approval of this proposal.

Our board of directors recommends a vote FOR ratification of the appointment of Nussbaum as our

independent auditors for the fiscal year ending November 30, 2007.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended for presentation at our 2008 annual meeting of shareholders and

intended to be included in our proxy statement and form of proxy relating to that meeting must be received at our

executive offices by January 8, 2008 and comply with the requirements of Rule 14a-8(e) promulgated under the

Securities Exchange Act of 1934.

OTHER BUSINESS

Other than as described above, our board of directors knows of no matters to be presented at the annual

meeting, but it is intended that the persons named in the proxy will vote your shares according to their best judgment

if any matters not included in this proxy statement do properly come before the meeting or any adjournment thereof.

ANNUAL REPORT

Our Annual Report on Form 10-K for the year ended November 30, 2006, including financial statements, is

being mailed with this proxy statement. If, for any reason, you do not receive your copy of the Annual Report,

please contact Mr. Paul H. Riss, Chief Executive Officer, eLEC Communications Corp., 75 South Broadway, Suite

302, White Plains, New York 10601, and another will be sent to you.

By Order of the Board of Directors,

PAUL H. RISS

Chairman of the Board

Dated: May 7, 2007

White Plains, New York

		ANNEX A

eLEC COMMUNICATIONS CORP.
AUDIT COMMITTEE CHARTER

PURPOSE

There shall be an Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of eLEC
Communications Corp., a New York corporation (the “Company”). The primary function of the Committee is to
assist the Board of Directors in fulfilling its oversight responsibilities, primarily through: 1) overseeing
management’s conduct of the Company’s financial reporting process and systems of internal accounting and
financial controls; and 2) monitoring the independence and performance of the Company’s outside auditors.

COMPOSITION AND MEETINGS

The Committee shall have at least three (3) members at all times, each of whom must be independent of
management and the Company; provided, however, the Committee may include one non-independent director until
such time as three qualified independent directors serve as members of the Board of Directors. Members of the
Committee shall be considered independent if: 1) in the sole discretion of the Board, it is determined that they have
no relationship that may interfere with the exercise of their independent judgment; and 2) they meet the NASDAQ
rules regarding independence of audit committee members. Members of the Committee shall be appointed by the
Board and shall serve until the earlier to occur of the date on which he or she shall: 1) be replaced by the Board; 2)
resign from the Committee; or 3) resign from the Board. All members of the Committee shall have a basic
understanding of finance and accounting and be able to read and understand fundamental financial statements or be
able to do so within a reasonable period of time after appointment to the Committee, and at least one member of the
Committee shall have accounting or related financial management expertise.

The Committee shall meet as frequently as circumstances dictate, but no less than four times annually. The
Board shall name a chairperson of the Committee. A majority of the members of the Committee shall constitute a
quorum.

LIMITATION ON COMMITTEE RESPONSIBILITIES

The Company’s management is responsible for preparing the Company’s financial statements and the
outside auditors are responsible for auditing and/or reviewing those financial statements. In carrying out its purpose,
the Committee is not providing any expert or special assurance as to the Company’s financial statements or any
professional certification as to the outside auditors’ work. The Committee’s specific responsibilities are as follows:

GENERAL

1.		The Committee shall have the power to conduct or authorize investigations into any matters consistent
with its purpose. The Committee shall be empowered to retain independent counsel, accountants, or others to assist
it in the conduct of any investigation. The Committee shall have unrestricted access to members of management and
all information relevant to its responsibilities.

2.		The Committee shall report through its chairperson to the Board following the meetings of the
Committee.

3.		The Committee shall review this charter and the powers and responsibilities of the Committee at least
annually and report and make recommendations to the Board with respect to these powers and responsibilities.

4.		The Committee shall maintain minutes or other records of meetings and activities of the Committee.

5.		The Committee shall prepare annual Committee reports for inclusion in the proxy statements for the
Company’s annual meetings, as required by rules promulgated by the Securities and Exchange Commission (the
“SEC”).

6.		The Committee shall, in addition to the performance of the duties described herein, undertake such
additional duties as may from time to time be delegated to it by the Board.

INTERNAL CONTROLS AND RISK ASSESSMENT

1.		The Committee shall consider and review with management and the outside auditors the effectiveness of
or weaknesses in the Company’s internal controls, including computerized information system controls and security,
the overall control environment and accounting and financial controls.

2.		The Committee shall obtain from the outside auditors their recommendations regarding internal controls
and other matters relating to the accounting procedures and the books and records of the Company and its
subsidiaries and reviewing the correction of controls deemed to be deficient.

OUTSIDE AUDITOR

1.		The outside auditors are ultimately accountable to the Board and the Committee, as the representatives
of the stockholders. The Board and the Committee shall have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the outside auditor (or to nominate the outside auditor to be proposed for
shareholder approval in any proxy statement). In this regard, the Committee shall recommend to the Board the
outside auditor to be nominated.

2.		The Committee shall confer with the outside auditors concerning the scope of their examinations of the
books and records of the Company and its subsidiaries; review and approve the Company’s annual audit plans; direct
the special attention of the outside auditors to specific matters or areas deemed by the Committee or the outside
auditors to be of special significance; and authorize the outside auditors to perform such supplemental reviews or
audits as the Committee may deem desirable.

3.		The Committee shall receive from the outside auditor on a periodic basis a formal written statement
delineating all relationships between the outside auditor and the Company, consistent with applicable standards. The
statement shall include a description of all services provided by the auditor and the related fees. The Committee
shall review costs of all audit and other services performed by the outside auditors.

4.		The Committee shall take, or recommend that the Board take, appropriate action to monitor the
independent status of the outside auditors.

FINANCIAL REPORTING

1.		The Committee shall review and discuss with the outside auditors and management the Company’s
audited annual financial statements that are to be included in the Company’s Annual Report on Form 10-KSB and
the outside auditors’ opinion with respect to such financial statements, including reviewing the nature and extent of
any significant changes in accounting principles or the application thereof; and determine whether to recommend to
the Board that the financial statements be included in the Company’s Form 10-KSB for filing with the SEC.

2.		The Committee shall review and discuss with the outside auditors and management, and require the
outside auditors to review, the Company’s interim financial statements to be included in the Company’s Quarterly
Reports on Form 10-Q prior to the filing thereof with the SEC.

3.		The Committee shall review the existence of significant estimates and judgments underlying the financial
statements, including the rationale behind those estimates as well as the details on material accruals and reserves and
the Company’s accounting principles.

COMPLIANCE WITH LAWS

1. The Committee shall review with the Company’s counsel and others any legal, tax or regulatory matters

that may have a material impact on the Company’s.

2. The Committee shall periodically review the rules promulgated by the SEC and NASDAQ relating to the

qualifications, activities, responsibilities and duties of audit committees and shall take, or recommend that the Board

take, appropriate action to comply with such rules.

ANNEX B


eLEC COMMUNICATIONS CORP.
2007 EQUITY INCENTIVE PLAN

This eLEC Communications Corp. 2007 Equity Incentive Plan (the “Plan”) is established by eLEC
Communications Corp., a New York corporation (the “Company”), effective as of April 2, 2007 (the “Effective
Date”). Capitalized terms not otherwise defined shall have the meanings set forth in Section 25.

1.	Purpose. The Plan is intended to provide qualifying Employees (including officers and Directors),
Independent Directors and Consultants with equity ownership in the Company, thereby strengthening their
commitment to the success of the Company, promoting the identity of interests between the Company’s shareholders
and such Employees, Independent Directors and Consultants and stimulating their efforts on behalf of the Company,
and to assist the Company in attracting and retaining talented personnel.

2.	Scope of the Plan. Subject to adjustment in accordance with Section 20, the total number of
Shares for which grants under the Plan shall be available is 2,000,000. If any Shares subject to any Award granted
hereunder are forfeited or such Award otherwise terminates without the issuance of such Shares or for other
consideration in lieu of such Shares, the Shares subject to such Award, to the extent of any such forfeiture or
termination, shall again be available for grant under the Plan. Shares awarded under the Plan may be treasury shares
or newly-issued shares.

3.	Administration.

	(a)	The Plan shall be administered by a Committee which shall consist of at least two or more
members of the Board, all of whom, so long as the Company remains a Public Company, shall qualify as “non-
employee directors” under Section (b)(3)(i) of Rule 16b-3. The number of members of the Committee may from
time to time be increased or decreased, and so long as the Company remains a Public Company, shall be subject to
such conditions, as the Board deems appropriate to permit transactions in Shares pursuant to the Plan to satisfy such
conditions of Rule 16b-3 as then in effect.

	(b)	Subject to the express provisions of the Plan, the Committee has full and final authority
and discretion as follows:

		(i)	to determine when and to whom Awards should be granted and the terms,
conditions and restrictions applicable to each Award, including, without limitation, (A) the exercise price of
the Award, (B) the method of payment for Shares purchased upon the exercise of the Award, (C) the
method of satisfaction of any tax withholding obligation arising in connection with the Award, (D) the
timing, terms and conditions of the exercisability of the Award or the vesting of any Shares acquired upon
the exercise thereof, (E) the time of the expiration of the vesting of any Shares acquired upon the exercise
thereof, (F) the effect of the Grantee’s termination of employment or service with the Company on any of
the foregoing, (G) all other terms, conditions and restrictions applicable to the Award or such Shares not
inconsistent with the terms of the Plan, (H) the benefit payable under any SAR or Performance Share, and
(I) whether or not specific Awards shall be identified with other specific Awards, and if so whether they
shall be exercisable cumulatively with, or alternatively to, such other specific Awards;

		(ii)	to determine the amount, if any, that a Grantee shall pay for Restricted Shares,
whether to permit or require the payment of cash dividends thereon to be deferred and the terms related
thereto, when Restricted Shares (including Restricted Shares acquired upon the exercise of any Award) shall
be forfeited and whether such Shares shall be held in escrow;

		(iii)	to interpret the Plan and to make all determinations necessary or advisable for
the administration of the Plan;

		(iv)	to make, amend and rescind rules, guidelines and policies relating to the Plan, or
to adopt supplements to, or alternative versions of, the Plan, including, without limitation, rules with respect
to the exercisability and forfeitability of Awards upon the termination of employment or service of a
Grantee;

		(v)	to determine the terms, conditions and restrictions of all Award Agreements
(which need not be identical) and, with the consent of the Grantee, to amend any such Award Agreement at
any time, among other things, to permit transfers of such Awards to the extent permitted by the Plan, except
that the consent of the Grantee shall not be required for any amendment which (A) does not adversely affect
the rights of the Grantee or (B) is necessary or advisable (as determined by the Committee) to carry out the
purpose of the Award as a result of any change in applicable law;

		(vi)	to cancel, with the consent of the Grantee, outstanding Awards and to grant new
Awards in substitution therefor;

		(vii)	to accelerate the exercisability of, and to accelerate or waive any or all of the
terms, conditions and restrictions applicable to, any Award or any group of Awards for any reason and at
any time, including in connection with a termination of employment (other than for Cause);

		(viii)	subject to Section 6(c), to extend the time during which any Award or group of
Awards may be exercised;

		(ix)	to make such adjustments or modifications to Awards to Grantees working
outside the United States as are advisable to fulfill the purposes of the Plan;

		(x)	to impose such additional terms, conditions and restrictions upon the grant,
exercise or retention of Awards as the Committee may, before or concurrent with the grant thereof, deem
appropriate; and

		(xi)	to take any other action with respect to any matters relating to the Plan for which
it is responsible.

		The determination of the Committee on all matters relating to the Plan or any Award
Agreement shall be final.

4.	Indemnification and Reimbursement. Service as a member of the Committee or any other duly
appointed subcommittee shall constitute service as a Board member, and such members shall accordingly be entitled
to full indemnification and reimbursement as Board members for their service as members of the Committee or any
other duly appointed subcommittee. No Committee or other duly appointed subcommittee member shall be liable for
any act or omission made in good faith with respect to the Plan or any Award granted under the Plan.

5.	Eligibility. The Committee may, in its discretion, grant Awards to any Eligible Person, whether or
not he or she has previously received an Award, except in the case of an ISO, which can only be granted to an
Employee of the Company or any Subsidiary.

6.	Conditions to Grants.

	(a)	General Conditions. Awards shall be evidenced by written Award Agreements specifying
the number of Shares covered thereby, in such form as the Committee shall from time to time establish. Award
Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:

		(i)	The Grant Date of an Award shall be the date on which the Committee grants the
Award or such later date as specified in advance by the Committee;

	(ii)	In the case of an Award of options, the Option Term shall under no
circumstances extend more than ten (10) years after the Grant Date and shall be subject to earlier
termination as herein provided; and

	(iii)	Any terms and conditions of an Award not set forth in the Plan shall be set forth
in the Award Agreement related to that Award.

(b)	Grant of Options. No later than the Grant Date of any option, the Committee shall
determine the Option Price of such option. Subject to Section 6(c), the Option Price of an option may be the Fair
Market Value of a Share on the Grant Date or may be less than or more than that Fair Market Value. An option shall
be exercisable for unrestricted Shares, unless the Award Agreement provides that it is exercisable for Restricted
Shares.

(c)	Grant of ISOs. At the time of the grant of any option, the Committee may, in its
discretion, designate that such option shall be made subject to additional restrictions to permit the option to qualify
as an “incentive stock option” under the requirements of Section 422 of the Code. Any option designated as an ISO:

	(i)	shall have an Option Price that is not less than the Fair Market Value of a Share
on the Grant Date and, if granted to a Ten Percent Owner, have an Option Price that is not less than 110%
of the Fair Market Value of a Share on the Grant Date;

	(ii)	shall be for a period of not more than ten (10) years and, if granted to a Ten
Percent Owner, not more than five (5) years, from the Grant Date and shall be subject to earlier termination
as provided herein or in the applicable Award Agreement;

	(iii)	shall meet the limitations of this subparagraph 6(c)(iii). If the aggregate Fair
Market Value of Shares with respect to which ISOs first become exercisable by a Grantee in any calendar
year exceeds the limit determined in accordance with the provisions of Section 422 of the Code (the
“Limit”) taking into account Shares subject to all ISOs granted by the Company that are held by the
Grantee, the excess will be treated as nonqualified options. To determine whether the Limit is exceeded,
the Fair Market Value of Shares subject to options shall be determined as of the Grant Dates of the options.
In reducing the number of options treated as ISOs to meet the Limit, the most recently granted options will
be reduced first. If a reduction of simultaneously granted options is necessary to meet the Limit, the
Committee may designate which Shares are to be treated as Shares acquired pursuant to an ISO;

	(iv)	shall be granted within ten (10) years from the Effective Date;

	(v)	shall require the Grantee to notify the Committee of any disposition of any
Shares issued upon the exercise of the ISO under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions, a “Disqualifying Disposition”), within ten (10) business days
after such Disqualifying Disposition; and

	(vi)	unless otherwise permitted by the Code, shall by its terms not be assignable or
transferable other than by will or the laws of descent and distribution and may be exercised, during the
Grantee’s lifetime, only by the Grantee, except that the Grantee may, in accordance with Section 7,
designate in writing a beneficiary to exercise his or her ISOs after the Grantee’s death.

(d)	Grant of SARs.

	(i)	When granted, SARs may, but need not, be identified with a specific option,
specific Restricted Shares, or specific Performance Shares of the Grantee (including any option, Restricted
Shares, or Performance Shares granted on or before the Grant Date of the SARs) in a number equal to or
different from the number of SARs so granted. If SARs are identified with Shares subject to an option, with
Restricted Shares, or with Performance Shares, then, unless otherwise provided in the applicable Award

Agreement, the Grantee’s associated SARs shall terminate upon (A) the expiration, termination, forfeiture,
or cancellation of such option, Restricted Shares or Performance Shares, (B) the exercise of such option or
Performance Shares, or (C) the date such Restricted Shares become nonforfeitable.

	(ii)	The strike price (the “Strike Price”) of any SAR shall equal, for any SAR that is
identified with an option, the Option Price of such option, or for any other SAR, one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date of such SAR, except that the Committee may
(A) specify a higher Strike Price in the Award Agreement or (B) provide that the benefit payable upon
exercise of any SAR shall not exceed such percentage of the Fair Market Value of a Share on such Grant
Date as the Committee shall specify.

(e)	Grant of Performance Shares.

	(i)	Before the grant of Performance Shares, the Committee shall:

		(A)	determine objective performance goals, which may consist of any one
or more of the following goals deemed appropriate by the Committee: earnings (either in the
aggregate or on a per share basis), operating income, cash flow, EBITDA (earnings before interest,
taxes, depreciation and amortization), return on equity, indices related to EVA (economic value
added), per share rate of return on the Common Stock (including dividends), general indices
relative to levels of general customer service satisfaction, as measured through various randomly-
generated customer service surveys, market share (in one or more markets), customer retention
rates, market penetration rates, revenues, reductions in expense levels, the attainment by the
Common Stock of a specified market value for a specified period of time, and any other object
performance goal deemed appropriate by the Committee, in each case where applicable to be
determined either on a company-wide basis, individual basis or in respect of any one or more
business units, and the amount of compensation under the goals applicable to such grant;

		(B)	designate a period for the measurement of the extent to which
performance goals are attained, which may begin simultaneously with, prior to or following the
Grant Date (the “Performance Period”); and

		(C)	assign a performance percentage to each level of attainment of
performance goals during the Performance Period, with the percentage applicable to minimum
attainment being zero percent and the percentage applicable to maximum attainment to be
determined by the Committee from time to time (the “Performance Percentage”).

	(ii)	If a Grantee is promoted, demoted, or transferred to a different business unit of
the Company during a Performance Period, then, to the extent the Committee determines any one or more
of the performance goals, Performance Period or Performance Percentage are no longer appropriate, the
Committee may make any changes thereto as it deems appropriate in order to make them appropriate.

	(iii)	When granted, Performance Shares may, but need not, be identified with Shares
subject to a specific option, specific Restricted Shares or specific SARs of the Grantee granted under the
Plan in a number equal to or different from the number of the Performance Shares so granted. If
Performance Shares are so identified, then, unless otherwise provided in the applicable Award Agreement,
the Grantee’s associated Performance Shares shall terminate upon (A) the expiration, termination, forfeiture
or cancellation of the option, Restricted Shares or SARs with which the Performance Shares are identified,
(B) the exercise of such option or SARs, or (C) the date Restricted Shares become nonforfeitable.

(f)	Grant of Restricted Shares.

	(i)	The Committee shall determine the amount, if any, that a Grantee shall pay for
Restricted Shares, subject to the following sentence. The Committee shall require the Grantee to pay at

least the Minimum Consideration for each Restricted Share. Such payment shall be made in full by the
Grantee before the delivery of the shares and in any event no later than ten (10) business days after the
Grant Date. In the discretion of the Committee and to the extent permitted by law, payment may also be
made in accordance with Section 9.

		(ii)	The Committee may, but need not, provide that all or any portion of a Grantee’s
Restricted Shares, or Restricted Shares acquired upon exercise of an option, shall be forfeited:

			(A)	except as otherwise specified in the Plan or the Award Agreement, upon
	the Grantee’s termination of employment within a specified time period after the Grant Date; or

			(B)	if the Company or the Grantee does not achieve specified performance
	goals (if any) within a specified time period after the Grant Date and before the Grantee’s
	termination of employment; or

			(C)	upon failure to satisfy such other conditions as the Committee may
	specify in the Award Agreement.

		(iii)	If Restricted Shares are forfeited and the Grantee was required to pay for such
shares or acquired such Restricted Shares upon the exercise of an option, the Grantee shall be deemed to
have resold such Restricted Shares to the Company at a price equal to the lesser of (A) the amount paid by
the Grantee for such Restricted Shares or (B) the Fair Market Value of the Restricted Shares on the date of
forfeiture, which shall be paid to the Grantee in cash as soon as administratively practicable. Such
Restricted Shares shall cease to be outstanding and shall no longer confer on the Grantee thereof any rights
as a shareholder of the Company, from and after the date of the event causing the forfeiture, whether or not
the Grantee accepts the Company’s tender of payment for such Restricted Shares.

		(iv)	The Committee may provide that the certificates for any Restricted Shares (A)
shall be held (together with a stock power executed in blank by the Grantee) in escrow by the Secretary of
the Company until such Restricted Shares become nonforfeitable or are forfeited or (B) shall bear an
appropriate legend restricting the transfer of such Restricted Shares. If any Restricted Shares become
nonforfeitable, the Company shall cause certificates for such shares to be issued without such legend.

		(v)	At the time of a grant of Restricted Shares, the Committee may require the
payment of cash dividends thereon to be deferred and, if the Committee so determines, reinvested in
additional Restricted Shares. Stock dividends or deferred cash dividends issued with respect to Restricted
Shares shall be subject to the same restrictions and other terms as apply to the Restricted Shares with
respect to which such dividends are issued. The Committee may in its discretion provide for payment of
interest on deferred cash dividends.

	(g)	Grant of Compensatory Shares. The Committee may grant Compensatory Shares to any
Eligible Person.

7.	Non-Transferability. An Award granted hereunder shall not be assignable or transferable other
than by will or the laws of descent and distribution and may be exercised during the Grantee’s lifetime only by the
Grantee or his or her guardian or legal representative, except that, subject to Section 6(c) in respect of ISOs, a
Grantee may, if permitted by the Committee, in its discretion, (a) designate in writing a beneficiary to exercise an
Award after his or her death (if that designation has been received by the Company prior to the Grantee’s death) and
(b) transfer the Award to one or more members of the Grantee’s Immediate Family or any other individuals or
entities.

8.	Exercise.

	(a)	Exercise of Options.

		(i)	Subject to Section 6, each option shall become exercisable at such time or times
as may be specified by the Committee from time to time in the applicable Award Agreement.

		(ii)	An option shall be exercised by the delivery to the Company during the Option
Term of (A) a written notice of intent to purchase a specific number of Shares subject to the option in
accordance with the terms of the option by the person entitled to exercise the option and (B) payment in full
of the Option Price of such specific number of Shares in accordance with Section 8(a)(iii).

		(iii)	Payment of the Option Price may be made by any one or more of the following
means:

			(A)	cash, check, or wire transfer;

			(B)	with the approval of the Committee, Mature Shares, valued at their Fair
	Market Value on the date of exercise;

			(C)	with the approval of the Committee, Restricted Shares held by the
	Grantee for at least six (6) months prior to the exercise of the option, each such share valued at the
	Fair Market Value of a Share on the date of exercise;

			(D)	so long as the Company remains a Public Company, in accordance with
	procedures previously approved by the Company, through the sale of the Shares acquired on
	exercise of the option through a bank or broker-dealer to whom the Grantee has submitted an
	irrevocable notice of exercise and irrevocable instructions to deliver promptly to the Company the
	amount of sale or loan proceeds sufficient to pay for such Shares, together with, if requested by the
	Company, the amount of federal, state, local or foreign withholding taxes payable by Grantee by
	reason of such exercise; or

			(E)	in the discretion of the Committee, payment may also be made in
	accordance with Section 9.

			(F)	with the approval of the Committee, in any combination of the
	foregoing or such other manner determined by the Committee.

The Committee may in its discretion specify that, if any Restricted Shares are used to pay the Option Price
(“Tendered Restricted Shares”), (A) all the Shares acquired on exercise of the option shall be subject to the same
restrictions as the Tendered Restricted Shares, determined as of the date of exercise of the option or (B) a number of
Shares acquired on exercise of the option equal to the number of Tendered Restricted Shares shall be subject to the
same restrictions as the Tendered Restricted Shares, determined as of the date of exercise of the option.

	(b)	Exercise of SARs.

		(i)	Subject to Section 6(d), (A) each SAR not identified with any other Award shall
become exercisable at such time or times as may be specified by the Committee from time to time in the
applicable Award Agreement and (B) except as otherwise provided in the applicable Award Agreement,
each SAR which is identified with any other Award shall become exercisable as and to the extent that the
option or Restricted Shares with which such SAR is identified may be exercised or becomes nonforfeitable,
as the case may be.

		(ii)	SARs shall be exercised by delivery to the Company of written notice of intent
to exercise a specific number of SARs. Unless otherwise provided in the applicable Award Agreement, the
exercise of SARs that are identified with Shares subject to an option or Restricted Shares shall result in the
cancellation or forfeiture of such option or Restricted Shares, as the case may be, to the extent of such
exercise.

		(iii)	The benefit for each SAR exercised shall be equal to (A) the Fair Market Value
of a Share on the date of such exercise, minus (B) the Strike Price specified in such SAR. Such benefit shall
be payable in cash, except that the Committee may provide in the Award Agreement that benefits may be
paid wholly or partly in Shares.

	(c)	Payment of Performance Shares. Unless otherwise provided in the Award Agreement
with respect to an Award of Performance Shares, if the minimum performance goals applicable to such Performance
Shares have been achieved during the applicable Performance Period, then the Company shall pay to the Grantee of
such Award that number of Shares equal to the product of:

		(i)	the sum of (A) number of Performance Shares specified in the applicable Award
Agreement and (B) the number of additional Shares that would have been issuable if such Performance
Shares had been Shares outstanding throughout the Performance Period and the stock dividends, cash
dividends (except as otherwise provided in the Award Agreement), and other property paid in respect of
such Shares had been reinvested in additional Shares as of each dividend payment date, multiplied by

		(ii)	the Performance Percentage achieved during such Performance Period.

The Committee may, in its discretion, determine that cash be paid in lieu of some or all of such Shares. The amount
of cash payable in lieu of a Share shall be determined by valuing such Share at its Fair Market Value on the business
day immediately preceding the date such cash is to be paid. Payments pursuant to this Section 8 shall be made as
soon as administratively practical after the end of the applicable Performance Period. Any Performance Shares with
respect to which the performance goals shall not have been achieved by the end of the applicable Performance
Period shall expire.

9.	Loans. The Committee may in its discretion allow a Grantee to defer payment to the Company of
all or any portion of (a) the Option Price of an option, (b) the purchase price of Restricted Shares, or (c) any taxes
associated with the exercise, nonforfeitability of, or payment of benefits in connection with, an Award. Any such
payment deferral by the Company shall be on such terms and conditions as the Committee may determine, except
that a Grantee shall not be entitled to defer the payment of such Option Price, purchase price, or any related taxes
unless the Grantee (a) enters into a binding obligation to pay the deferred amount and (b) other than with respect to
treasury shares, pays upon exercise of an option or grant of Restricted Shares, as applicable, an amount at least equal
to the Minimum Consideration therefor. If the Committee has permitted a payment deferral in accordance with this
Section 9, then the Committee may require the immediate payment of such deferred amount upon the Grantee’s
termination of employment or if the Grantee sells or otherwise transfers his or her Shares purchased pursuant to such
deferral. The Committee may at any time in its discretion forgive the repayment of any or all of the principal of, or
interest on, any such deferred payment obligation.

10.	Notification under Section 83(b). If the Grantee, in connection with the exercise of any option or
the grant of Restricted Shares, makes the election permitted under Section 83(b) of the Code to include in such
Grantee’s gross income in the year of transfer the amounts specified in Section 83(b) of the Code, then such Grantee
shall notify the Company, in writing, of such election within ten (10) days after filing the notice of the election with
the Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under
Section 83(b) of the Code. The Committee may, in connection with the grant of an Award or at any time thereafter,
prohibit a Grantee from making the election described in this Section 10.

11.	Mandatory Tax Withholding.

	(a)	Whenever under the Plan, Shares are to be delivered upon exercise or payment of an
Award or upon Restricted Shares becoming nonforfeitable, or any other event with respect to rights and benefits
hereunder, the Company shall be entitled to require (i) that the Grantee remit an amount in cash, or in the Company’s
discretion, Mature Shares or any other form of consideration, sufficient to satisfy all federal, state and local tax
withholding requirements related thereto (“Required Withholding”), (ii) the withholding of such Required
Withholding from compensation otherwise due to the Grantee or from any Shares due to the Grantee under the Plan,
or (iii) any combination of the foregoing.

	(b)	Any Grantee who makes a Disqualifying Disposition or an election under Section 83(b) of
the Code shall remit to the Company an amount sufficient to satisfy all resulting Required Withholding, except that
in lieu of or in addition to the foregoing, the Company shall have the right to withhold such Required Withholding
from compensation otherwise due to the Grantee or from any Shares or other payment due to the Grantee under the
Plan.

	(c)	Any surrender by a Section 16 Grantee of previously owned shares of Common Stock to
satisfy tax withholding arising upon exercise of the Award must comply with the applicable provisions of Rule 16b-
3(e) under the 1934 Act.

12.	Elective Share Withholding. At the Company’s discretion, a Grantee may, with the prior consent
of the Committee, elect the withholding by the Company of a portion of the Shares otherwise deliverable to such
Grantee upon the exercise of an Award or upon Restricted Shares becoming nonforfeitable (each, a “Taxable Event”)
having a Fair Market Value equal to the minimum amount necessary to satisfy the Required Withholding liability
attributable to the Taxable Event.

13.	Termination of Employment.

	(a)	For Cause. Except as otherwise provided by the Committee in an Award Agreement, if a
Grantee’s employment is terminated for Cause, (i) the Grantee’s Restricted Shares (and any SARs identified
therewith) that are then forfeitable shall on the date of the Grantee’s termination of employment be forfeited on such
date, subject to the provisions of Section 6(f)(iii) regarding repayment of certain amounts to the Grantee; and (ii) any
unexercised option, SAR or Performance Share shall terminate effective immediately upon such termination of
employment.

	(b)	On Account of Death. Except as otherwise provided by the Committee in the Award
Agreement, if a Grantee’s employment terminates on account of death, then:

		(i)	the Grantee’s Restricted Shares (and any SARs identified therewith) that are then
forfeitable shall on the date of the Grantee’s termination of employment be forfeited on such date;

		(ii)	any unexercised option or SAR, to the extent exercisable on the date of such
termination of employment, may be exercised, in whole or in part, within the first twelve (12) months after
such termination of employment (but only during the Option Term) after the death of the Grantee by (A) his
or her personal representative or by the person to whom the option or SAR, as applicable, is transferred by
will or the applicable laws of descent and distribution, (B) the Grantee’s designated beneficiary, or (C) a
Permitted Transferee; and

		(iii) any unexercised Performance Shares may be exercised in whole or in part, at any
time within six (6) months after such termination of employment on account of the death of the Grantee, by
(A) his or her personal representative or by the person to whom the Performance Shares are transferred by
will or the applicable laws of descent and distribution, (B) the Grantee’s designated beneficiary, or (C) a
Permitted Transferee, except that the benefit payable with respect to any Performance Shares for which the
Performance Period has not ended as of the date of such termination of employment on account of death

shall be equal to the product of Fair Market Value of such Performance Shares multiplied successively by
each of the following:

		(A)	a fraction, the numerator of which is the number of months (including
as a whole month any partial month) that has elapsed since the beginning of such Performance
Period until the date of such termination of employment and the denominator of which is the
number of months (including as a whole month any partial month) in the Performance Period; and

		(B)	a percentage determined in the discretion of the Committee that would
be earned under the terms of the applicable Award Agreement assuming that the rate at which the
performance goals have been achieved as of the date of such termination of employment would
continue until the end of the Performance Period, or, if the Committee elects to compute the
benefit after the end of the Performance Period, the Performance Percentage, as determined by the
Committee, attained during the Performance Period for such Performance Shares.

(c)	On Account of Disability. Except as otherwise provided by the Committee in the Award
Agreement, if a Grantee’s employment terminates on account of Disability, then:

	(i)	the Grantee’s Restricted Shares (and any SARs identified therewith) that are then
forfeitable shall on the date of the Grantee’s termination of employment be forfeited on such date;

	(ii)	any unexercised option or SAR, to the extent exercisable on the date of such
termination of employment, may be exercised in whole or in part, within the first twelve (12) months after
such termination of employment (but only during the Option Term) by the Grantee, or by (A) his or her
personal representative or by the person to whom the option or SAR, as applicable, is transferred by will or
the applicable laws of descent and distribution, (B) the Grantee’s designated beneficiary, or (C) a Permitted
Transferee; and

	(iii)	any unexercised Performance Shares may be exercised in whole or in part, at any
time within six (6) months after such termination of employment on account of Disability by the Grantee, or
by (A) his personal representative or by the person to whom the Performance Shares are transferred by will
or the applicable laws of descent and distribution, (B) the Grantee’s designated beneficiary, or (C) a
Permitted Transferee, except that the benefit payable with respect to any Performance Shares for which the
Performance Period has not ended as of the date of such termination of employment on account of
Disability shall be equal to the product of the Fair Market Value of the Performance Shares multiplied
successively by each of the following:

			(A)	a fraction, the numerator of which is the number of months
(including as a whole month any partial month) that have elapsed since the beginning of such
Performance Period until the date of such termination of employment and the denominator of
which is the number of months (including as a whole month any partial month) in the Performance
Period; and

			(B)	a percentage determined in the discretion of the Committee
that would be earned under the terms of the applicable Award Agreement assuming that the rate at
which the performance goals have been achieved as of the date of such termination of employment
would continue until the end of the Performance Period, or, if the Committee elects to compute the
benefit after the end of the Performance Period, the Performance Percentage, as determined by the
Committee, attained during the Performance Period for such Performance Shares.

(d)	Any Reason Other Than For Cause Or On Account of Death or Disability. Except as
otherwise provided by the Committee in the Award Agreement, if a Grantee’s employment terminates for any reason
other than for Cause, or on account of death or Disability, then:

		(i)	the Grantee’s Restricted Shares (and any SARs identified therewith), that are
then forfeitable shall on the date of the Grantee’s termination of employment be forfeited on such date;

		(ii)	any unexercised option or SAR (other than a SAR identified with a Restricted
Share or Performance Share), to the extent exercisable immediately before the Grantee’s termination of
employment, may be exercised in whole or in part, not later than three (3) months after such termination of
employment (but only during the Option Term); and

		(iii)	the Grantee’s Performance Shares (and any SARs identified therewith) shall
terminate effective immediately upon such termination of employment.

14.	Substituted Awards. If the Committee cancels any Award (whether granted under the Plan or any
plan of any entity acquired by the Company or a Subsidiary), the Committee may, in its discretion, substitute a new
Award therefor upon such terms and conditions consistent with the Plan as the Committee may determine, except
that (a) the Option Price of any new option, and the Strike Price of any new SAR, shall not be less than one hundred
percent (100%) (one hundred ten percent (110%) in the case of an incentive stock option granted to a Ten Percent
Owner) of the Fair Market Value of a Share on the date of the grant of the new Award; and (b) the Grant Date of the
new Award shall be the date on which such new Award is granted.

15	Securities Law Matters.

	(a)	If the Committee deems necessary to comply with any applicable securities law, the
Committee may require a written investment intent representation by the Grantee and may require that a restrictive
legend be affixed to certificates for Shares. If, based upon the advice of counsel to the Company, the Committee
determines that the exercise or nonforfeitability of, or delivery of benefits pursuant to, any Award would violate any
applicable provision of (i) federal or state securities laws or (ii) the listing requirements of any national exchange or
national market system on which are listed any of the Company’s equity securities, then the Committee may
postpone any such exercise, nonforfeitability or delivery, as applicable, but the Company shall use all reasonable
efforts to cause such exercise, nonforfeitability or delivery to comply with all such provisions at the earliest
practicable date.

	(b)	Grants of options to Section 16 Grantees shall comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required thereunder for such grants to qualify for exemption
from liability under Section 16(b) of the 1934 Act.

16.	No Employment Rights. Neither the establishment of the Plan nor the grant of any Award shall (a)
give any Grantee the right to remain employed by the Company or any Subsidiary or to any benefits not specifically
provided by the Plan or (b) modify the right of the Company or any Subsidiary to modify, amend, or terminate the
Plan or any other employee benefit plan or employment agreement.

17.	No Rights as a Shareholder. A Grantee shall not have any rights as a shareholder of the Company
with respect to the Shares (other than Restricted Shares) which may be deliverable upon exercise or payment of an
Award until such Shares have been delivered to him or her. Restricted Shares, whether held by a Grantee or in
escrow by the Company, shall confer on the Grantee all rights of a shareholder of the Company, except as otherwise
provided in the Plan or applicable Award Agreement.

18.	Nature of Payments. Awards shall be special incentive payments to the Grantee and shall not be
taken into account in computing the amount of salary or compensation of the Grantee for purposes of determining
any pension, retirement, death or other benefit under (a) any pension, retirement, profit-sharing, bonus, insurance or
other employee benefit plan of the Company or any Subsidiary or (b) any agreement between (i) the Company or any
Subsidiary and (ii) the Grantee, except as such plan or agreement shall otherwise expressly provide.

19.	Non-uniform Determinations. The Committee’s determinations under the Plan need not be
uniform and may be made by the Committee selectively among persons who receive, or are eligible to receive,

Awards, whether or not such persons are similarly situated. Without limiting the generality of the foregoing, the
Committee shall be entitled to enter into non-uniform and selective Award Agreements as to (a) the identity of the
Grantees, (b) the terms and provisions of Awards, including, without limitation, vesting and manner of payment of
purchase price upon exercise, and (c) the treatment of terminations of employment.

20.	Adjustments. The Committee shall make equitable adjustment of:

	(a)	the aggregate number of Shares available under the Plan for Awards and the aggregate
number of Shares for which Awards may be granted to any individual Grantee in any calendar year pursuant to the
second sentence of Section 2;

	(b)	the number of Shares, SARs or Performance Shares covered by an Award; and

	(c)	the Option Price of all outstanding options and the Strike Price of all outstanding SARs;

to reflect a stock dividend, stock split, reverse stock split, share combination, recapitalization, merger, consolidation,
spin-off, split-off, reorganization, rights offering, liquidation or similar event of or by the Company.

21.	Amendment of the Plan. The Committee may from time to time, in its discretion, amend the Plan
without the approval of the Company’s shareholders, except (a) as such shareholder approval may be required under
the listing requirements of any securities exchange or national market system on which are listed the Company’s
equity securities and (b) that the Committee may not without the approval of the Company’s shareholders amend the
Plan to increase the total number of shares reserved for the purposes of the Plan (other than in accordance with
Section 20).

22.	Termination of the Plan. The Plan shall continue in effect until the earlier of its termination by the
Committee or the date on which all of the shares of Common Stock available for issuance under the Plan have been
issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Awards granted
under the Plan have lapsed. However, all Awards shall be granted, if at all, within ten (10) years from the earlier of
the date the Plan is adopted by the Committee or the date the Plan is duly approved by the shareholders of the
Company. Notwithstanding the foregoing, if the maximum number of shares of Common Stock issuable pursuant to
the Plan has been increased at any time, all Awards shall be granted, if at all, no later than the last day preceding the
ten (10) year anniversary of the earlier of (a) the date on which the latest such increase in the maximum number of
shares of Common Stock issuable under the Plan was approved by the shareholders of the Company or (b) the date
such amendment was adopted by the Committee. No termination shall affect any Award then outstanding under the
Plan.

23.	No Illegal Transactions. The Plan and all Awards granted pursuant to it are subject to all
applicable laws and regulations. Notwithstanding any provision of the Plan or any Award, Grantees shall not be
entitled to exercise, or receive benefits under any Award, and the Company shall not be obligated to deliver any
Shares or deliver benefits to a Grantee, if such exercise or delivery would constitute a violation by the Grantee or the
Company of any applicable law or regulation.

24.	Constructive Sales. The Grantee shall not directly or indirectly, through related parties or
otherwise, “short” or “short against the box” (as those terms are generally understood in the securities markets), or
otherwise directly or indirectly (through derivative instruments or otherwise) dispose of or hedge, any securities of
the Company issuable upon exercise of such Grantee’s Award(s).

25.	Definitions. The terms set forth below have the indicated meanings which are applicable to both
the singular and plural forms thereof:

	“Award” shall mean options, including ISOs, Restricted Shares, Compensatory Shares, SARs or
Performance Shares granted under the Plan.

	“Award Agreement” shall mean the written agreement by which an Award shall be evidenced.

	“Board” shall mean the Board of Directors of the Company.

	“Cause”, with respect to any employee or consultant of the Company shall have the meaning set
forth in such person’s employment or consulting agreement or, in the absence of such an agreement or if such term is
not defined in such agreement, shall mean any one or more of the following, as determined by the Committee (in the
case of a Section 16 Grantee) or the Chief Executive Officer or President of the Company (in the case of any other
Grantee):

	(i)	a Grantee’s commission of a crime that is likely to result in injury to the
Company or a Subsidiary;

	(ii)	the material violation by the Grantee of written policies of the Company or a
Subsidiary;

	(iii)	the habitual neglect by the Grantee in the performance of his or her duties to the
Company or a Subsidiary; or

(iv)	a Grantee’s willful misconduct or inaction in connection with his or her duties to the Company or a
Subsidiary resulting in a material injury to the Company or a Subsidiary.

	“Code” shall mean the Internal Revenue Code of 1986, as amended or superseded, and the
regulations and rulings thereunder. Reference to a particular section of the Code shall include references to
successor provisions.

	“Committee” shall mean the committee of the Board appointed pursuant to Section 3(a), or if not
so appointed or unable to act or with reference to Awards to Independent Directors, shall mean the entire Board.

	“Common Stock” shall mean the common stock, $0.10 par value per share, of the Company.

	“Compensatory Shares” shall mean Shares that are awarded to a Grantee without cost and without
restrictions either as a bonus, in lieu of cash compensation for services rendered to the Company or for any other
compensatory purpose.

	“Consultant” shall mean any person, including a Director, who is engaged by the Company or any
Parent, Subsidiary or Affiliate thereof to render services to or for the benefit of the Company and is compensated for
such services, including any member of the Advisory Board of the Company.

	“Director” shall mean a member of the Board.

	“Disability” shall mean a permanent and total disability, within the meaning of Section 22(e)(3) of
the Code.

	“Effective Date” shall mean the date set forth in the first paragraph hereof.

	“Eligible Person” shall mean any Employee, Consultant or Director of the Company or any
Subsidiary, including any prospective Employee or Employee on an approved leave of absence or layoff, if such
leave or layoff does not qualify as a Disability.

	“Employee” shall mean any person treated as an employee (including officers and directors) in the
records of the Company (or Subsidiary) and who is subject to the control and direction of the Company (or
Subsidiary) with regard to both the work to be performed and the manner and method of performance. The payment

of a director’s fee by the Company (or Subsidiary) to a Director shall not be sufficient to constitute “employment” of
the Director by the Company (or Subsidiary).

“Fair Market Value” per share of Common Stock on any relevant date shall mean such value as
determined in accordance with the following provisions:

(i)		If the Common Stock is at that time listed on a national securities exchange, then
the Fair Market Value shall mean the closing selling price per share of Common Stock on the exchange on which
such Common Stock is principally traded on the relevant date or, if there were no sales on that date, the closing
selling price of such Common Stock on the last preceding date on which there were sales.

(ii)		If the Common Stock is at that time traded on the Nasdaq Market^®, Nasdaq
Small Cap Market^SMor OTC Bulletin Board^®, as the case may be, then the Fair Market Value shall mean the closing
selling price per share of Common Stock on the relevant date, as the price is reported by the National Association of
Securities Dealers on the Nasdaq Market^®, Nasdaq Small Cap Market^SMor OTC Bulletin Board^®, as the case may
be, or any successor system. If there is no closing selling price for the Common Stock on the relevant date, then the
Fair Market Value shall mean the closing selling price on the last preceding date for which such quotation exists.

(iii)		If the Common Stock is neither listed on any national securities exchange nor
traded on the Nasdaq Market^®, Nasdaq Small Cap Market^SMor OTC Bulletin Board^®, then the Fair Market Value
shall mean that value determined by the Committee after taking into account such factors as the Committee shall in
good faith deem appropriate.

“Grant Date” shall have the meaning specified in Section 6(a).

“Grantee” shall mean a person who has been granted an Award or any Permitted Transferee.

“ISO” shall mean an incentive stock option within the meaning of Section 422 of the Code.

“Immediate Family” shall mean, with respect to a particular Grantee, the Grantee’s spouse,
children and grandchildren.

“Independent Director” shall mean a member of the Board who in not an Employee of the
Company.

“Mature Shares” shall mean Shares for which the holder thereof has good title, free and clear of all
liens and encumbrances, and which such holder has held for at least six (6) months.

“Minimum Consideration” shall mean par value per Share or such other amount that is from time
to time considered to be minimum consideration under applicable law.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended. References to a
particular section of the 1934 Act or rule thereunder, include references to successor provisions.

“Option Price” shall mean the per share exercise price of an option.

“Option Term” shall mean the period beginning on the Grant Date of an option and ending on the
expiration date of such option, as specified in the Award Agreement for such option and as may, in the discretion of
the Committee and consistent with the provisions of the Plan, be extended from time to time.

“Performance Shares” shall mean an Award to a Grantee pursuant to Section 6(e).

“Permitted Transferee” shall mean a person to whom an Award may be transferred or assigned in
accordance with Section 7.

“Public Company” shall mean any entity issuing any class of equity securities that has been, or is
required to be, registered under Section 12 of the 1934 Act.

“Restricted Shares” shall mean Shares that are subject to forfeiture if the Grantee does not satisfy
the conditions specified in the Award Agreement applicable to those Shares.

“Rule 16b-3” shall mean Rule 16b-3 of the SEC under the 1934 Act, as amended from time to
time, together with any successor rule.

“SAR” shall mean a stock appreciation right.

“SEC” shall mean the Securities and Exchange Commission.

“Section 16 Grantee” shall mean a person who is subject to potential liability under Section 16(b)
of the 1934 Act with respect to transactions involving equity securities of the Company.

“Share” shall mean a share of Common Stock.

“Strike Price” shall have the meaning specified in Section 6(d)(ii).

“Subsidiary” shall mean a subsidiary corporation, as defined in Section 424(f) of the Code (with
the Company being treated as the employer corporation for purposes of this definition).

“Ten Percent Owner” shall mean a person who owns capital stock (including stock treated as
owned under Section 424(d) of the Code) possessing more than ten percent of the total combined Voting Power of
all classes of capital stock of the Company or any Subsidiary.

“Voting Power” shall mean the combined voting power of the then-outstanding securities of the
Company entitled to vote generally in the election of directors.

26.		Controlling Law. The law of the State of New York, except its law with respect to choice of law,
shall control all matters relating to the Plan.

27.		Severability. If any part of the Plan is declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other part of the Plan. Any Section or
part of a Section so declared to be unlawful or invalid shall, if possible, be construed in a manner which will given
effect to the terms of such Section to the fullest extent possible while remaining lawful and valid.

ANNEX C

PROPOSED AMENDMENT TO

CERTIFICATE OF INCORPORATION OF

eLEC COMMUNICATIONS CORP.

Proposed Amendments to Certificate of Incorporation. The following provision reflects the manner in

which the applicable section of the Certificate of Incorporation of eLEC Communications Corp. will be amended if

Proxy Items 4 and 5 are both approved by the shareholders at the annual meeting. If one of the foregoing Proxy

Items is not approved by the shareholders, then the language pertaining to such Proxy Item will not be included in

the Certificate of Amendment filed with the Secretary of the State of New York.

The first paragraph of Article FOURTH of the company’s Certificate of Incorporation is amended in its

entirety to read as follows:

“Fourth: A. Authorized Shares. The total number of shares of all classes of stock which the Company

shall have the authority to issue ~~is FiftyOne~~One Hundred Fifty-One Million (~~51,000,000~~151,000,000), of

which ~~Fifty~~One Hundred Fifty Million (~~50,000,000~~150,000,000) shall be common stock, par value ~~$.10~~

$.001 per share, and One Million (1,000,000) shall be preferred stock, par value $.001 per share.”

REVOCABLE PROXY
eLEC COMMUNICATIONS CORP.


This Proxy is solicited on Behalf of the Board of Directors


x	PLEASE MARK VOTES		For	With-	For all
	AS IN THIS EXAMPLE			hold	Except

			PROPOSAL 1: ¨	¨	¨

The undersigned hereby appoint(s) Paul H. Riss and Greg M. Cooper, or			The Election of Directors:
either of them, lawful attorneys and proxies of the undersigned with full power
of substitution, for and in the name, place and stead of the undersigned to
attend the Annual Meeting of Shareholders of eLEC Communications Corp.			Paul H. Riss, Greg M. Cooper, Michael H. Khalilian, Gayle Greer
(the “Company”) to be held at 75 South Broadway, Suite 302, White Plains,			and S. Miller Williams
New York 10601 on Thursday, June 7, 2007 at 10:00 a.m., local time, and any
adjournment(s) or postponement(s) thereof, with all powers the undersigned			INSTRUCTION: To withhold authority to vote for any individual
would possess if personally present and to vote the number of votes the			nominee, mark “For All Except” and write that nominee’s name in the
undersigned would be entitled to vote if personally present.			space provided below.


The Board of Directors recommends a vote "FOR" the proposals set forth
below.			For	Against	Abstain
			PROPOSAL 2: ¨	¨	¨
In accordance with their discretion, said Attorneys and Proxies are
authorized to vote upon such other matters or proposals not known at the			2007 Equity Incentive Plan:
time of solicitation of this proxy which may properly come before the
meeting.			Proposal to approve the adoption of the 2007 Equity Incentive Plan of the
			Company.
This proxy when properly executed will be voted in the manner
described herein by the undersigned shareholder. If no direction is made,			For	Against	Abstain
this proxy will be voted for the Proposals set forth herein. Any prior			PROPOSAL 3: ¨	¨	¨
proxy authorized by the undersigned is hereby revoked.
			Change Name of Company:
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders and the related Proxy Statement dated			Proposal to amend the Certificate of Incorporation of the Company to change
May 7, 2007.			the name of the Company to PervasipCorp.

			For	Against	Abstain
			PROPOSAL 4: ¨	¨	¨

			Increase Authorized Shares of
			Capital Stock:

			Proposal to amend the Certificate of Incorporation of the Company to increase
			the total number of shares of capital stock the Company is authorized to issue.

			For	Against	Abstain
			PROPOSAL 5: ¨	¨	¨

			Change Par Value:

			Proposal to amend the Certificate of Incorporation of the Company to change
Please be sure to sign and date			the par value of shares of our Capital Stock from $.10 per share to $.001 per
this Proxy in the box below.		Date:	share.

			For	Against	Abstain
			PROPOSAL 6: ¨	¨	¨

			Independent Auditors:

			Ratification of the appointment of Nussbaum Yates & Wolpow, P.C. as the
			independent auditors of the Company for the fiscal year ending November 30,
			2007
Shareholder sign above Co-holder (if any) sign above

eLEC COMMUNICATIONS CORP.
Please sign exactly as your name appears on this proxy card. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or
corporation, please sign in full corporate name by president or other authorized person. If a partnership, please sign in partnership name by authorized person.

PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY