Document:

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                                                                    EXHIBIT 10.2

                                JFAX.COM, INC.
                             AMENDED AND RESTATED
                            1997 STOCK OPTION PLAN
                            ----------------------

                                   ARTICLE I

                                   PURPOSES
                                   --------

          1.1. Purpose of Plan.  The purpose of the JFAX Communications, Inc.
               ----------------
(JFAX.COM) 1997 Stock Option Plan (the "Plan") are to advance the interests of
JFAX.COM, Inc.(the "Company") and its shareholders by providing significant
incentives to selected officers, employees, and consultants of the Company who
contribute and are expected to contribute to the success of the Company, and to
enhance the interest of such officers and employees in the Company's success and
progress by providing them with an opportunity to become shareholders of the
Company. Further, the Plan is designed to enhance the Company's ability to
attract and retain qualified employees necessary for the success and progress of
the Company.

                                  ARTICLE II

                                  DEFINITIONS
                                  -----------

          2.1. Definitions.  Certain terms used herein shall have the meaning
               ------------
below stated, subject to the provisions of Section 7.1 hereof.

                  (a) "Board" or "Board of Directors" means the Board of
          Directors of the Company.

                  (b) "Code" means the Internal Revenue Code of 1986, as
          amended.

                  (c) "Committee" means either (i) the Board of Directors or
          (ii) the Compensation Committee of the Board of Directors or such
          other committee of the Board as shall be appointed by the Board to
          administer the Plan pursuant to Article VII hereof.

                  (d) "Common Stock" means, subject to the provisions of
          Section 9.3, the authorized common stock of the Company, par value
          $.01 per share.

                  (e) "Company" means JFAX.COM, Inc.

                  (f) "Effective Date" means the date on which the Company's
          1997 Stock Option Plan is adopted by the Board or the date the Plan is
          approved by the stockholders of the Company, whichever is earlier.

                  (g) "Employee" means (i) any individual who is a common-law
          employee of the Company or of a Subsidiary, (ii) a member of the Board
          of Directors, or (iii) any consultant or other persons to the extent
          permitted by the instructions to Form S-8 under the Securities Act of
          1933, as amended, who performs services for the Company or a
          Subsidiary. Service as a member
<PAGE>

          of the Board of Directors or as a consultant shall be considered
          employment for all purposes under the Plan except the third sentence
          of Section 4.1.

                  (h) "Fair Market Value" means, in respect of a share of
          Common Stock on any date, the last reported sales price regular way on
          such date or, in case no such reported sale takes place on such date,
          the last reported sales price regular way on the day preceding such
          date on which a reported sale occurred, in either case on the New York
          Stock Exchange or, if at the time the Common Stock is not listed or
          admitted to trading on such Exchange, on the principal national
          securities exchange on which the Common Stock is listed or admitted to
          trading or, if at the time the Common Stock is not listed or admitted
          to trading on any national securities exchange, in the National
          Association of Securities Dealers Automated Quotations National Market
          System or, if at the time the Common Stock is not listed or admitted
          to trading on any national securities exchange or quoted on such
          National Market System, the average of the closing bid and asked
          prices in the over-the-counter market as furnished by any New York
          Stock Exchange member firm selected from time to time by the Company
          for that purpose or, if the Common Stock is not traded over-the-
          counter, as determined by the Committee using any reasonable valuation
          method.

                  (i) "Incentive Stock Option" means an Option to purchase
          Common Stock, granted by the Company to an Employee pursuant to
          Section 5.1 hereof, which meets the requirements of Section 422 of the
          Code.

                  (j) "Nonstatutory Stock Option" means an Option to purchase
          Common Stock, granted by the Company to an Employee pursuant to
          Section 5.1 hereof, which does not meet the requirements of Section
          422 of the Code or which provides, as of the time the Option is
          granted, that it will not be treated as an Incentive Stock Option.

                  (k) "Option" means an Incentive Stock Option or a
          Nonstatutory Stock Option.

                  (l) "Option Agreement" means an agreement between the Company
          and an Optionee evidencing the terms of an Option Granted under the
          Plan.

                  (m) "Optionee" means an Employee to whom an Option has been
          granted under the Plan.

                  (n) "Plan" means the JFAX.COM, Inc. 1997 Stock Option Plan,
          as set forth herein and as from time to time amended.

                  (o) "Subsidiary" means a subsidiary of the Company within the
          meaning of Section 424(f) of the Code.

                                  ARTICLE III

               EFFECTIVE DATE OF THE PLAN; RESERVATION OF SHARES
               -------------------------------------------------

          3.1. Effective Date.  The Plan shall become effective as of the
               ---------------
Effective Date.

          3.2. Shares Reserved Under Plan.  The aggregate number of shares of
              ---------------------------
Common Stock which may be issued upon the exercise of Options granted under the
Plan shall not exceed 3,500,000 of the authorized shares of Common Stock on the
Effective Date, all or any part of which may be issued pursuant to Incentive
<PAGE>

Stock Options or Nonstatutory Stock Options or any combination thereof. Shares
of Common Stock issued upon the exercise of Options granted under the Plan may
consist of either authorized but unissued shares or shares which have been
issued and which shall have been reacquired by the Company.  The total number of
shares authorized under the Plan shall be subject to increase or decrease in
order to give effect to the provisions of Section 9.3 and to give effect to any
amendment adopted pursuant to Article VIII.  If any Option granted under the
Plan shall expire, terminate or be cancelled for any reason without having been
exercised in full, the number of shares as to which such Option was not
exercised shall again be available for purposes of the Plan.  The Company shall
at all times while the Plan is in effect reserve such number of shares of Common
Stock as will be sufficient to satisfy the requirements of the Plan.

                                  ARTICLE IV

                             PARTICIPATION IN PLAN
                             ---------------------

          4.1. Eligibility.  Options under the Plan may be granted to any key
              ------------
Employee of the Company or a Subsidiary who performs services for the Company or
a Subsidiary that the Committee deems to be of special importance to the growth
and success of the Company. The Committee shall determine those Employees to
whom Options shall be granted, the type of Option to be granted to each such
person, and, subject to Sections 3.2 hereof, the number of shares of Common
Stock subject to each such Option. Only individuals who are employed as common-
law employees by the Company or a Subsidiary shall be eligible for the grant of
Incentive Stock Options.

          4.2. Participation Not Guarantee of Employment or Retention. Nothing
               -------------------------------------------------------
in this Plan or in any Option Agreement shall in any manner be construed to
limit in any way the right of the Company or any Subsidiary to terminate an
Employee's employment at any time, without regard to the effect of such
termination on any rights such Employee would otherwise have under this Plan, or
give any right to an Employee to remain employed by the Company or a Subsidiary
thereof in any particular position or at any particular rate of compensation.

                                   ARTICLE V

                         GRANT AND EXERCISE OF OPTIONS
                         -----------------------------

          5.1. Grant of Options.  The Committee may from time to time in its
               -----------------
discretion grant Incentive Stock Options and/or Nonstatutory Stock Options to
Employees at any time after the Effective Date. All Options under the Plan shall
be granted within ten (10) years from the date the Plan is adopted by the Board
or the date the Plan is approved by the stockholders of the Company, whichever
is earlier.

          5.2. Option Terms.  Options granted under the Plan shall be subject
               -------------
to the following requirements:

                  (a) Option Price.  The exercise price of each Incentive Stock
          Option shall not be less than the higher of the par value or 100% of
          the Fair Market Value of the shares of Common Stock subject to the
          Option on the date the Option is granted. The exercise price of each
          Nonstatutory Stock Option shall be the amount determined by the
          Committee as set forth in the applicable Option Agreement, provided
          that such amount shall not be less than the higher of the par value or
          85% of the Fair Market Value of the shares of Common Stock subject to
          the Option on the date the Option is granted, provided further that
          options may only be granted at less than 100% of the Fair Market Value
          of the shares of Common Stock subject to the Option on the date of
          grant if the discount is
<PAGE>

          expressly in lieu of a reasonable amount of salary or cash bonus, as
          determined by the Board of Directors or the Committee in its sole
          discretion. The exercise price of an Option may be subject to
          adjustment pursuant to Section 9.3 hereof.

                  (b) Term of Option.  The term during which an Option is
          exercisable shall be that period determined by the Committee as set
          forth in the applicable Option Agreement, provided that no Option
          shall have a term that exceeds a period of 10 years from the date of
          its grant.

                  (c) Nontransferability of Option.  No Option granted under
          the Plan shall be transferable by the Optionee otherwise than by will
          or the laws of descent and distribution, and each such Option shall be
          exercisable during the Optionee's lifetime only by him. No transfer of
          an Option by an Optionee by will or by the laws of descent and
          distribution shall be effective to bind the Company unless the Company
          shall have been furnished with written notice thereof and a copy of
          the will and/or such other evidence as the Committee may determine
          necessary to establish the validity of the transfer.

                  (d)  Exercise of Option.  Unless the Option Agreement
          pursuant to which an Option is granted provides otherwise, each Option
          shall become exercisable, on a cumulative basis, with respect to 25%
          of the aggregate number of the shares of Common Stock covered thereby
          on the first anniversary of the date of grant and with respect to an
          additional 25% of the shares of Common Stock covered thereby on each
          of the next three (3) succeeding anniversaries of the date of grant;
          provided, however, the Committee may establish a different vesting
          --------
          schedule for any optionee or group of optionees. Any portion of an
          Option which has become exercisable shall remain exercisable until it
          is exercised in full or terminates pursuant to the terms of the Plan
          or the Option Agreement pursuant to which it is granted.

                  (e) Acceleration of Exercise on Change of Control.
          Notwithstanding the provisions of paragraph (d) of this Section or any
          other restrictions limiting the number of shares of Common Stock as to
          which an Option may be exercised, each Option shall become immediately
          exercisable in full upon and simultaneously with any "Change of
          Control" of the Company unless the Board determines that the optionee
          has been offered substantially identical replacement options and a
          comparable position at any acquiring company. For purposes of this
          Plan, a "Change of Control" shall be deemed to have occurred if:

                           (i) any "person," as such term is used in Sections
                  13(d) and 14(d) of the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act") (other than the Company, any
                  employee benefit plan sponsored by the Company, any trustee or
                  other fiduciary holding securities under an employee benefit
                  plan of the Company, or any corporation owned, directly or
                  indirectly, by the stockholders of the Company in
                  substantially the same proportions as their ownership of stock
                  of the Company), is or becomes the "beneficial owner" (as
                  defined in Rule 13d-3 under the Exchange Act), directly or
                  indirectly, of securities of the Company representing 50% or
                  more of the combined voting power of the Company's then
                  outstanding securities;

                           (ii) during any period of two consecutive years
                  individuals who at the beginning of such period constitute the
                  Board, and any new director (other than a director designated
                  by a person who has entered into an agreement with the Company
                  to effect a transaction described in clause (i), (iii) or (iv)
                  of this Section) whose election by the Board or nomination for
                  election by the Company's stockholders was approved by a vote
                  of at least a
<PAGE>

                  majority of the directors then still in office who either were
                  directors at the beginning of the period or whose election or
                  nomination for election was previously so approved, cease for
                  any reason to constitute at least a majority thereof;

                           (iii) the stockholders of the Company approve a
                  merger or consolidation of the Company with any other
                  corporation, other than a merger or consolidation which would
                  result in the voting securities of the Company outstanding
                  immediately prior thereto continuing to represent (either by
                  remaining outstanding or by being converted into voting
                  securities of the surviving entity) more than 50% of the
                  combined voting power of the voting securities of the Company
                  or such surviving entity outstanding immediately after such
                  merger or consolidation; or

                           (iv)  the stockholders of the Company approve a plan
                  of complete liquidation of the Company or an agreement for the
                  sale or disposition by the Company of all or substantially all
                  of the Company's assets. For the purposes of this subsection
                  (iv), "substantially all" of the Company's assets shall mean
                  assets for which the price or consideration upon sale or
                  disposition equals or exceeds seventy-five percent (75%) or
                  more of the fair market value of the Company.

          (f) Incentive Stock Options Granted to Ten Percent Shareholders.  No
Incentive Stock Options shall be granted to any Employee who owns, directly or
indirectly within the mean of Section 424(d) of the Code, stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary, unless at the time the Incentive Stock Option is
granted, the exercise price of the Incentive Stock Option is at least 110% of
the Fair Market Value of the Common Stock subject to such Incentive Stock Option
and such Incentive Stock Option, by its terms, is not exercisable after the
expiration of five years from the date such Incentive Stock Option is granted.

          (g) Limitation on Incentive Stock Options.  To the extent that the
aggregate Fair Market Value of the Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by an Optionee during any
calendar year (under all plans of the Company and its parent and subsidiary
corporations) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For this purpose, Options shall be taken into account in the
order in which they were granted and the Fair Market Value of the Common Stock
shall be determined as of the time the Option with respect to such Common Stock
is granted.

          5.3. Payment of Exercise Price and Delivery of Shares.
               -------------------------------------------------

          (a) Notice and Payment for Shares.  Each Option shall be exercised by
delivery of a written notice to the Company in such form as the Committee shall
approve stating the number of the whole shares of Common Stock as to which the
Option is being exercised and accompanied by payment therefor. No Option shall
be deemed exercised in the event that payment therefor is not received and
shares of Common Stock shall not be issued upon the exercise of an Option unless
the exercise price is paid in full. Payment for shares of Common Stock purchased
upon the exercise of an Option shall be made by (i) cash, (ii) certified check
payable to the order of the Company, (iii) outstanding shares of Common Stock
duly endorsed to the Company (which shares of Common Stock shall be valued at
their Fair Market Value as of the day preceding the date of such exercise), (iv)
any combination of the foregoing, or (v) such other method of payment as may be
provided in the applicable Option Agreement.
<PAGE>

          (b) Rights of Optionee in Stock.  Neither any Optionee nor the legal
representatives, heirs, legatees or distributees of any Optionee, shall be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock issuable upon exercise of an Option
granted hereunder unless and until such shares are issued to him or them and
such person or persons have received a certificate or certificates therefor.
Upon the issuance and receipt of such certificate or certificates, such Optionee
or the legal representatives, heirs, legatees or distributees of such Optionee
shall have absolute ownership of the shares of Common Stock evidenced thereby,
including the right to vote such shares, to the same extent as any other owner
of shares of Common Stock, and to receive dividends thereon, subject, however,
to the terms, conditions and restrictions of this Plan.

                                  ARTICLE VI

                             TERMINATION AND DEATH
                             ---------------------

          6.1. Termination Other Than by Death or for Cause.  If an Optionee's
               ---------------------------------------------
position as an Employee of the Company or a Subsidiary terminates for any reason
other than death or for Cause (as defined in Section 6.2) he may, unless the
applicable Option Agreement provides otherwise, exercise an Option previously
granted and vested within three months after the date of such termination, but
in no event later than the date on which the Option would have expired in
accordance with its terms. To the extent the Option is not so exercised, it
shall expire at the end of such three-month period.

          6.2. Termination for Cause.  If an Optionee's position as an Employee
               ----------------------
of the Company or a Subsidiary is terminated for Cause, any Option theretofore
granted to him shall expire and cease to be exercisable on the date notice of
such termination is delivered to the Optionee. "Cause" shall mean (a) the
willful and continued failure by an Optionee to substantially perform his duties
with the Company (other than any such failure resulting from his incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Optionee by the Board, which demand specifically
identifies the manner in which the Board believes that the Optionee has not
substantially performed his duties, or (b) the willful engaging by the Optionee
in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Section 6.2, no act, or failure to
act, shall be deemed "willful" unless done, or omitted to be done, not in good
faith and without reasonable belief that such action or omission was in the best
interest of the Company.

          6.3. Death.  If an Optionee dies (i) while he is an Employee of the
               ------
Company or a Subsidiary or (ii) during the three-month period after the
termination of his position as an Employee of the Company or a Subsidiary, and
at the time of his death the Optionee was entitled to exercise an Option
theretofore granted to him, such Option shall, unless the applicable Option
Agreement provides otherwise, expire one year after the date of his death, but
in no event later than the date on which the Option would have expired if the
Optionee had lived. During such one-year period the Option may be exercised by
the Optionee's executor or administrator or by any person or persons who shall
have acquired the Option directly from the Optionee by bequest or inheritance,
but only to the extent that the Optionee was entitled to exercise the Option at
the date of his death and, to the extent the Option is not so exercised, it
shall expire at the end of such one-year period.

                                  ARTICLE VII

                            ADMINISTRATION OF PLAN
                            ----------------------
<PAGE>

          7.1. Administration.  The Plan shall be administered by the
               ---------------
Compensation Committee of the Board of Directors or such other committee as may
be appointed by the Board of Directors of the Company, which Committee shall
consist of not less than two members, all of whom are members of the Board of
Directors. A majority of the Committee shall constitute a quorum thereof and the
actions of a majority of the Committee at a meeting at which a quorum is
present, or actions unanimously approved in writing by all members of the
Committee, shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board. The Committee shall have full and final
authority (i) to interpret the Plan and each of the Option Agreements, (ii) to
prescribe, amend and rescind rules and regulations, if any, relating to the
Plan, (iii) to make all determinations necessary or advisable for the
administration of the Plan and (iv) to correct any defect, supply any omission
and reconcile any inconsistency in the Plan and any Option Agreement. The
Committee's determination in all matters referred to herein shall be conclusive
and binding for all purposes and upon all persons including, but without
limitation, the Company, the shareholders of the Company, the Committee, and
each of the members thereof, Employees and their respective successors in
interest.

          7.2. Liability.  No member of the Committee shall be liable for
               ----------
anything done or omitted to be done by him or by any other member of the
Committee in connection with the Plan, except for his own willful misconduct or
gross negligence. The Committee shall have power to engage outside consultants,
auditors or other professional help to assist in the fulfillment of the
Committee's duties under the Plan at the Company's expense.

          7.3. Determinations.  In making its determinations concerning the key
               ---------------
Employees who shall receive Options as well as the number of shares to be
covered thereby and the time or times at which they shall be granted, the
Committee shall take into account the nature of the services rendered by such
key Employees, their past, present and potential contribution to the Company's
success and such other factors as the Committee may deem relevant.  The
Committee shall determine the form of Option Agreements under the Plan and the
terms and conditions to be included therein, provided such terms and conditions
are not inconsistent with the terms of the Plan.  The Committee may waive any
provisions of any Option Agreement, provided such waiver is not inconsistent
with the terms of the Plan as then in effect.  The Committee's determinations
under the Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Options under the Plan, whether
or not such persons are similarly situated.

                                 ARTICLE VIII

                       AMENDMENT AND TERMINATION OF PLAN
                       ---------------------------------

          8.1. Amendment of Plan.  (a) Generally. The Board of Directors may
               ------------------
amend the Plan at any time and from time to time. Rights and obligations under
any Option granted before amendment of the Plan shall not be materially altered,
or impaired adversely, by such amendment, except with consent of the Optionee.
An amendment of the Plan shall be subject to the approval of the Company's
stockholders only to the extent required by applicable laws, regulations or
rules.

          (b) Amendments Relating to Incentive Stock Options.  To the extent
applicable, the Plan is intended to permit the issuance of Incentive Stock
Options to Employees in accordance with the provisions of Section 422 of the
Code. Subject to paragraph 8.1(a) above, the Plan and Option Agreements may be
modified or amended at any time, both prospectively and retroactively, and in a
manner that may affect Incentive Stock Options previously granted, if such
amendment or modification is necessary for the Plan and Incentive Stock Options
granted hereunder to qualify under said provisions of the Code.
<PAGE>

          8.2. Termination.  The Board may at any time terminate the Plan as of
               ------------
any date specified in a resolution adopted by the Board. If not earlier
terminated, the Plan shall terminate on November 11, 2007. No Options may be
granted after the Plan has terminated, but the Committee shall continue to
supervise the administration of Options previously granted.

                                  ARTICLE IX

                           MISCELLANEOUS PROVISIONS
                           ------------------------

          9.1. Restrictions upon Grant of Options.  If the listing upon any
               -----------------------------------
stock exchange or the registration or qualification under any federal or state
law of any shares of Common Stock to be issued on the exercise of Options
granted under this Plan (whether to permit the grant of Options or the resale or
other disposition of any such shares of Common Stock by or on behalf of
Optionees receiving such shares) should be or become necessary or desirable, the
Board in its sole discretion may determine that delivery of the certificates for
such shares of Common Stock shall not be made until such listing, registration
or qualification shall have been completed. The Company agrees that it will use
its best efforts to effect any such listing, registration or qualification,
provided, however, that the Company shall not be required to use its best
efforts to effect such registration under the Securities Act of 1933 other than
on Form S-8 or such other forms as may be in effect from time to time calling
for information comparable to that presently required to be furnished under
Form S-8.

          9.2. Restrictions upon Resale of Unregistered Stock.  Each Optionee
               -----------------------------------------------
shall, if the Company deems it advisable, represent and agree in writing (i)
that any shares of Common Stock acquired by such Optionee pursuant to this Plan
will not be sold except pursuant to an effective registration statement under
the Securities Act of 1933 or pursuant to an exemption from registration under
said Act, (ii) that such Optionee is acquiring such shares of Common Stock for
his own account and not with a view to the distribution thereof, and (iii) to
such other customary matters as the Company may request. In such case, no shares
of Common Stock shall be issued to such Optionee unless such Optionee provides
such representations and agreements and the Company is reasonably satisfied that
such representations and agreements are correct.

          9.3. Adjustments.
               ------------

          (a)  General.  In the event of a subdivision of the outstanding Common
Stock, a declaration of a dividend payable in shares of Common Stock, a
declaration of a dividend payable in a form other than shares in an amount that
has a material effect on the value of shares of Common Stock, a combination or
consolidation of the outstanding Common Stock into a lesser number of shares of
Common Stock, a recapitalization, a reclassification or a similar occurrence,
the Committee shall make appropriate adjustments in one or more of (i) the
number of shares of Common Stock available for future grants of Options under
Section 3.2, (ii) the number of shares of Common Stock covered by each
outstanding Option, or (iii) the exercise price of each outstanding Option.

          (b)  Reorganizations. In the event that the Company is a party to a
merger or reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization.

          (c)  Reservation of Rights.  Except as provided in this Section 9.3,
an Optionee shall have no rights by reason of (i) any subdivision or
consolidation of shares of stock of any class, (ii) the payment of any dividend,
or (iii) any other increase or decrease in the number of shares of stock of any
class. Any
<PAGE>

issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or exercise price of shares of
Common Stock subject to an Option. The grant of Option Shares pursuant to the
Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.

          9.4. Withholding of Taxes.
               ---------------------
         (a) Each Optionee who exercises a Nonstatutory Stock Option shall agree
that no later than the date of such exercise or receipt of shares of Common
Stock pursuant thereto he will pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state or local
taxes of any kind required by law to be withheld with respect to the transfer to
him of such shares of Common Stock.

          (b) The applicable Option Agreement may provide that an Optionee may
satisfy, in whole or in part, the requirements of paragraph (a):

                  (i) by delivery of shares of Common Stock owned by the
          Optionee for at least six months (or such shorter or longer period as
          the Committee may approve) having a Fair Market Value (determined as
          of the date of such delivery) equal to all or part of the amount to be
          so withheld, or

                  (ii) by electing to have the Company withhold the requisite
          number of shares from shares otherwise deliverable pursuant to the
          exercise of the Option giving rise to the tax withholding obligation
          provided, however, that

                         (A) the Optionee's election and the withholding
                  pursuant thereto take effect during the period beginning on
                  the third business day following the date of release for
                  publication of the quarterly and annual summary statements of
                  the Company's sales and earnings and ending on the twelfth
                  business day following such date, and six months have elapsed
                  since the date the Option was granted, or

                         (B) such election was irrevocably made by the Optionee
                  and filed with the Committee in writing at least six months in
                  advance of the date on which such withholding occurs.

The Committee may require, as a condition of accepting any such delivery of
Common Stock or any such election by the Optionee, that the Optionee furnish to
the Company an opinion of counsel to the effect that such delivery or election
will not result in the Optionee incurring any liability under Section 16(b) of
the Securities Exchange Act of 1934, as amended.

          9.5. Use of Proceeds.  The proceeds from the sale of Common Stock
               ----------------
pursuant to Options granted under the Plan shall constitute general funds of the
Company and may be used for such corporate purposes as the Company may
determine.

          9.6. Substitution of Options.
               ------------------------

          (a) The Committee may, with the consent of the holder of any Option
granted under the Plan, cancel such Option and grant a new Option in
substitution therefor, provided that the Option as so substituted shall satisfy
all of the requirements of the Plan as of the date such new Option is granted.
<PAGE>

          (b) Options may be granted under this Plan in substitution for
options held by individuals who are employees of another corporation and who
become Employees of the Company or any Subsidiary of the Company eligible to
receive Options pursuant to the Plan as a result of a merger, consolidation,
reorganization or similar event. The terms and conditions of any Options so
granted may vary from those set forth in the Plan to the extent deemed
appropriate by the Committee in order to conform the provisions of Options
granted pursuant to the Plan to the provisions of the options in substitution
for which they are granted.

          9.7. Notices.  Any notice required or permitted hereunder shall be
               --------
sufficiently given only if sent by registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company at its principal place of
business, and to the Optionee at the address on file with the Company at the
time of grant hereunder, or to such other address as either party may hereafter
designate in writing by notice similarly given by one party to the other.

          9.8. Governing Law.  The Plan and all determinations made and actions
               --------------
taken hereunder, to the extent not otherwise governed by the Code or the laws of
the Untied States of America, shall be governed by the laws of the State of
California and construed accordingly.<PAGE>

                                                                  EXHIBIT 10.20

                             EMPLOYMENT AGREEMENT

          THIS AGREEMENT, made and entered into as of January 26, 2000, by and
among JFAX.COM, Inc., a Delaware corporation (the "Company"), and Steven J.
Hamerslag ("Employee").

          WHEREAS, the Company is purchasing all or substantially all the issued
and outstanding stock of Employee's previous employer, SureTalk.com, Inc.
("SureTalk.com"), of which Employee was Chief Executive Officer and a principal
owner, pursuant to the Stock Purchase Agreement, dated as of January 15, 2000
(the "Purchase Agreement"), among the Company, SureTalk.com and the stockholders
of SureTalk.com;

          WHEREAS, it is a material term of such Purchase Agreement that
Employee shall be employed by the Company and that both parties shall agree to
the terms and conditions herein;

          WHEREAS, the Company desires to secure the services of Employee, and
Employee is willing to provide such services, each upon the terms and subject to
the conditions set forth in this Agreement.

          NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:

      1.  CERTAIN DEFINITIONS.  For the purposes of this Agreement, the parties
          -------------------
hereby adopt the following definitions:

          "Board" has the meaning set forth in Section 2(a).

          "Cause" means:

                  (1)  commission by Employee of any act or omission to perform
any act, including, but not limited to, any harassment of any employee of the
Company, which results in serious adverse consequences to the Company, subject
to the proviso at the end of this definition (but excluding the omission to
perform any act attributable to Employee's Total Disability);

                  (2)  breach of any of Employee's agreements set forth in this
Agreement including, but not limited to, continual material failure to perform
his duties with the Company, excessive absenteeism and dishonesty, subject to
the proviso at the end of this definition;

                  (3)  Employee's indictment for, or written confession of, or
commission of, a felony or any crime involving moral turpitude under the laws of
the United States or any state;

                  (4)  death of Employee;

                  (5)  declaration by a court that Employee is insane or
incompetent to manage his business affairs; or

                  (6)  the filing of any petition or other proceeding seeking
to find Employee bankrupt or insolvent;
<PAGE>

Provided that any act or omission to act by Employee under clause (i) or (ii)
above was done or omitted willfully or through the gross negligence or bad faith
of Employee.

          A "Change in Control" shall be deemed to have occurred if, at or
before the fourth anniversary of the Closing,  any person or group of persons
(as defined in Section 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) together with its affiliates, excluding employee
benefit plans of the Company, and excluding Richard S. Ressler and any
affiliates of Mr. Ressler, (A) is or becomes, directly or indirectly, the
"beneficial owner" (as defined in rule 13d-3 promulgated under the 1934 Act) of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding securities or (B) acquires, through
purchase, merger or otherwise, directly or indirectly, all or substantially all
of the Company's assets.

          "Closing" has the meaning set forth in the Purchase Agreement and is
occurring on or about the date of this Agreement.

          "Company" means JFAX.COM, Inc., a Delaware corporation.

          "Confidential Information" has the meaning set forth in Section 7(a).

          "Dollars", "$" and "US$" means United States dollars.

          "Employee" means Steven J. Hamerslag.

          "Escrow Agreement" means the Escrow Agreement, dated as of January 26,
2000, among the Company, Employee and City National Bank, as escrow agent (the
"Escrow Agent").

          "Good Reason" means that Employee voluntarily terminates his
employment hereunder following (x) a change in the reporting relationship
between Employee and the Board, committees of the Board or the Company's
Chairman of the Board, i.e. if the Company interposes some other person between
Employee and the Board, a Board committee or the Chairman or (y) a requirement
by the Board that Employee must move from Carlsbad, California in order to carry
out his duties under this Agreement.

          "Issued Shares" has the meaning set forth in Section 6(a).

          "Market Price" is equal to $5.9375 per share.
          "Promissory Note" has the meaning set forth in Section 6(b).

          "Proprietary Information" has the meaning set forth in Section 7(b).

          "Purchase Agreement" has the meaning set forth in the recitals above.

          "Repurchase Price" is equal to the Market Price multiplied by 10,000,
or $59,375 per share of the Issued Shares.
<PAGE>

          "Repurchase Right" has the meaning set forth in Section 6.

          "SureTalk.com" has the meaning set forth in the recitals above.

          "Termination" means, according to the context, the termination of this
Agreement or the cessation of rendering employment services by Employee.

          "Total Disability" means Employee shall become disabled to an extent
which renders him unable to perform the essential functions of his job, with or
without reasonable accommodation, for a cumulative period of twenty-four (24)
weeks in any twelve (12) month period.

          "Treasury Rate" means the annualized yield for United States
government securities with a maturity of one year, as published in the Wall
Street Journal on the business day immediately preceding the Closing and each
anniversary of the Closing during the term of this Agreement, and so that such
rate shall adjust on each such anniversary commencing in January 2001.

      2.  EMPLOYMENT.
          ----------

                  (1)  Commencing on the date of this Agreement, the Company
hereby employs Employee and Employee hereby accepts employment by the Company to
serve as Chief Executive Officer of the Company. Employee shall perform services
of an executive nature consistent with the chief executive office of the Company
as may from time to time be reasonably assigned or delegated to him by the board
of directors of the Company (the "Board"). Nothing in this Agreement is intended
to ensure that Employee will continue as the Chief Executive Officer of the
Company, and he understands that he serves in that position at the pleasure of
the Board. Nevertheless, so long as Employee serves as the Chief Executive
Officer of the Company, the Company agrees that he will be nominated as one of
the management nominees for service on the Board, commencing at the first annual
meeting of stockholders occurring after the date of this Agreement.

                  (2)  Employee will devote his full business time and
attention to his duties under this Agreement.

                  (3)  Employee shall perform his duties under this Agreement
principally in or around Los Angeles, California. However, it is understood that
Employee will continue to reside in or around Carlsbad, California. He will
spend some of his working days in or around San Diego, California but will spend
approximately 80% of his working days in or around Los Angeles, California. He
will be responsible for his own travel arrangements in commuting to and from his
home and the Company's offices, but he will be reimbursed by the Company at the
rate of $100 per each round trip between his home and Los Angeles, plus
reasonable hotel room reimbursement in Los Angeles. The Company understands that
Employee may use his personal aircraft for commuting between his home and Los
Angeles and for business travel. If Employee uses his personal aircraft for
business travel he will be reimbursed by the Company at the coach fare rate. In
addition, it is contemplated Employee will frequently travel to carry out his
duties under this Agreement, and in these instances, other than as set
<PAGE>

forth in the immediately preceding sentence, air travel and other travel
arrangements will comply with current Company policies respecting class of
travel, etc.

                  (4)  The Company will provide to Employee, his spouse and
children medical benefits which are provided to other similarly situated
employees of the Company.

                  (5)  Employee shall have two (2) weeks paid vacation and one
(1) week of unpaid vacation during each year of this Agreement taken at such
times as are mutually convenient to Employee and the Company. For purposes of
vacation accrual, Employee will be given credit for service commencing from July
1, 1999.

      3.  TERM OF EMPLOYMENT.
          ------------------

                  (1)  This Agreement and Employee's employment hereunder shall
commence on the date of this Agreement, and continue until the fourth
anniversary of such date, and shall thereafter be renewed annually at each
anniversary date (commencing with the anniversary falling in 2004) for an
additional one year period so that the term hereof at each renewal date shall be
a one year period, unless a party to this Agreement gives notice at least ninety
(90) days prior to such renewal date that this Agreement shall not be renewed,
in which case this Agreement shall terminate on the applicable anniversary date.

                  (2)  Notwithstanding Paragraph (a) above, this Agreement may
be sooner terminated by the Company with or without Cause, by Employee with or
without Good Reason, or by the Company in the event of the Total Disability of
Employee.

                  (3)  On termination of this Agreement pursuant to Paragraph
(a) or (b) above, all benefits and compensation shall cease as of the date of
such Termination, but nothing in this provision is intended to alter the
specific provisions contained in Section 6 relating to either a Termination by
the Company without Cause, or a Termination by Employee for Good Reason. Also,
nothing in this provision is intended to alter or limit the Company's
obligations under COBRA.

      4.  BUSINESS EXPENSE REIMBURSEMENT.  Employee will be entitled to
          ------------------------------
reimbursement by the Company for the reasonable business expenses paid by him on
behalf of the Company in the course of his employment hereunder on presentation
to the Company of appropriate vouchers (accompanied by receipts or paid bills)
setting forth information sufficient to establish:

                  (1)  the amount, date, and place of each such expense;

                  (2)  the business reason for each such expense and the nature
 of the business benefit derived or expected to be derived as a result thereof;
 and

                  (3)  the names, occupations, addresses, and other information
sufficient to establish the business relationship to the Company of any person
who was entertained by Employee.
<PAGE>

          Employee will also be entitled to reimbursement by the Company for up
to $50,000.00 per year of discretionary expenses incurred by Employee.  These
expenses are not subject to the foregoing requirements, but Employee will
provide appropriate documentation, and understands that the Company will treat
this amount as additional compensation to the extent Employee does not establish
the deductiblity of these expenses for tax purposes.

      5.  COMPENSATION AND BENEFITS.  The Company agrees to pay Employee, and
          -------------------------
Employee agrees to accept from the Company, during the first year after the date
hereof, for the services to be rendered by him hereunder a salary at the rate of
US$200,000 per annum payable in arrears in installments that are paid at least
monthly.  Employee shall receive annual salary reviews by the Board to consider
increases for merit, cost of living, and the like.

          If the Company has instituted or institutes a retirement, bonus or
other benefit plan which applies generally to U.S. executives of the Company,
Employee shall be entitled to participate therein, on terms determined by the
Board to be comparable to other U.S. executives of the Company, but not to the
extent such benefits would be duplicative of the benefits herein.  The Company
will provide annual reviews by the Board of Employee's performance for
consideration of his participation in the Company's cash bonus plan.  Since
Employee will have a significant ownership of shares of the common stock of the
Company, this participation shall not include stock option plans, or similar
plans, unless the Board determines otherwise.  The Company agrees that if other
directors or senior officers are granted indemnification agreements, in addition
to the indemnification provisions in the Company's by-laws, Employee shall be
entitled to a similar indemnification agreement.  The Company agrees to maintain
director's and officer's insurance, for the benefit of directors and officers,
including Employee, as per similarly situated companies.

      6.  ISSUANCE OF STOCK.
          -----------------

                  (a)  Stock Issuance.  The Company shall issue Employee 120
                       --------------
partly paid shares of Series B convertible preferred stock of the Company
("Issued Shares") upon execution of this Agreement and Employee shall make
payment in cash to the Company equal to $1.00 per share (i.e., a total of $120).
The Issued Shares shall be delivered into escrow under the Escrow Agreement, and
are subject to repurchase by the Company pursuant to Subsection (c) of this
Section 6. Each Issued Share will be convertible at the option of the holder
into 10,000 shares of common stock of the Company (i.e., 1,200,000 shares in the
aggregate) but only after each such Issued Share is delivered out of escrow to
Employee, which will require at least proportionate payment of the Promissory
Note and expiration of the Repurchase Right of the Company with respect to the
Issued Shares to be delivered out of escrow, as more fully provided in the
Promissory Note and the Escrow Agreement. The Issued Shares will be entitled to
preferential dividends on a participating "as converted" basis with the common
stock, subject to Section 156 of the Delaware General Corporation Law ("DGCL"),
to a liquidation preference of $1.00 per share or (if greater) an amount
calculated on an "as converted" basis with the common stock but not in excess of
the amount per share actually paid to the Company for the Issued Shares
including payments of principal of the Promissory Note, and to no voting or
other rights except as provided in the DGCL.
<PAGE>

                  (b)  Promissory Note.  In further consideration for the
                       ---------------
Issued Shares, Employee shall concurrently issue a promissory note ("Promissory
Note") to the Company in an amount equal to 1,200,000 multiplied by the Market
Price less the cash payment by Employee under Section 6(a). The Promissory Note
shall be non-recourse but secured by a pledge of the Issued Shares as
collateral. The Promissory Note shall accrue interest at the Treasury Rate, with
interest payable annually in arrears, and will mature five (5) years following
issuance.

                  (c)  Stock Repurchase.  In consideration for the employment
                       ----------------
relationship, Employee hereby grants the Company the right to repurchase
("Repurchase Right") all or a portion of the Issued Shares, at a price equal to
the Repurchase Price, provided that in lieu of making such payment in cash the
Company shall be entitled to set off against amounts owing to the Company under
the Promissory Note, with a corresponding reduction in the Promissory Note,
according to the following terms:

                       (i)  The Company may, following any Termination occurring
          before the fourth anniversary of the Closing (except as otherwise
          provided in clause (ii) below), whatever the reason for such
          Termination, elect to repurchase up to the following number of Issued
          Shares:

                            A.  120 Issued Shares, if the Termination occurs
                  before the first anniversary of the Closing, provided that
                  such Repurchase Right shall be limited to 90 Issued Shares if
                  such Termination is by the Company without Cause or if such
                  Termination is by Employee for Good Reason.

                            B.  90 Issued Shares, if the Termination occurs on
                  or after the first anniversary of the Closing but before the
                  second anniversary of the Closing, provided that such
                  Repurchase Right shall be limited to 60 Issued Shares if such
                  Termination is by the Company without Cause or if such
                  Termination is by Employee for Good Reason.

                            C.  60 Issued Shares, if the Termination occurs on
                  or after the second anniversary of the Closing but before the
                  third anniversary of the Closing, provided that such
                  Repurchase Right shall be limited to 30 Issued Shares if such
                  Termination is by the Company without Cause or if such
                  Termination is by Employee for Good Reason.

                            D.  30 Issued Shares, if the Termination occurs on
                  or after the third anniversary of the Closing but before the
                  fourth anniversary of the Closing, provided that such
                  Repurchase Right shall be limited to zero Issued Shares if
                  such Termination is by the Company without Cause or if such
                  Termination is by Employee for Good Reason.

                            E.  Zero Issued Shares, if the Termination occurs
                  on or after the fourth anniversary of the Closing.

                       (ii) Notwithstanding the foregoing, immediately prior
          to a Change in Control of the Company, the Repurchase Right of the
          Company shall terminate, with respect to any Termination occurring
          thereafter.
<PAGE>

                       (iii)  The Company shall be entitled to exercise the
          Repurchase Right at a price per share of the Issued Shares being
          repurchased equal to the Repurchase Price.

                  (d) Anti-dilution.  In order to accomplish an appropriate
                      --------------
anti-dilution protection for all parties, it is agreed that any distribution of
Issued Shares out of escrow under the Escrow Agreement will include the Other
Escrow Property (as defined in the Escrow Agreement) that derives from such
Issued Shares.  In the case of any stock split, or stock combination, or
dividend payable on the Company's common stock in the form of shares of the
Company's common stock, appropriate adjustments to the conversion ratio of the
Issued Shares and to the Repurchase Right of the Company will be made.

                  (e) Exercise of Repurchase Right.  Subject to the foregoing
                      -----------------------------
conditions, the Company may exercise the Repurchase Right by delivering notice
thereof to Employee of its election to do so, and setting forth the portion of
the Issued Shares to be repurchased, the price at which they will be
repurchased, and the anticipated date (which shall not be less than 15 days from
the date of such notice) on which the Repurchase Right will be executed.  In
that connection, the Company shall comply with the applicable provisions of the
Escrow Agreement, including delivering the required Certified Notice (as defined
in the Escrow Agreement) to the Escrow Agent.  Employee hereby consents to the
foregoing.

                  (f) Investment Representation, Etc.  Employee understands and
                      -------------------------------
agrees that the Issued Shares shall not be transferrable (except by will or
intestacy or transfer into trust for the sole benefit of Employee or his spouse
or issue), and that the common stock issuable upon conversion of the Issued
Shares will be restricted as to transfer by the Company so as to ensure
compliance with applicable securities laws, provided that such common stock
shall have the benefit of the Registration Rights Agreement referred to in the
Purchase Agreement. Employee hereby makes to the Company the same
representations and warranties with respect to the Issued Shares and such common
stock as are contained in Section 2.19 of the Purchase Agreement with respect to
the Purchaser Stock (as defined in the Purchase Agreement).

      7.  CONFIDENTIALITY, ETC.
          ---------------------

                  (1)  Employee understands and agrees that he has been exposed
to (or had access to), and may be further exposed to (or have access to),
confidential information, knowhow, knowledge, data, techniques, computer
software and hardware, and trade secrets of the Company or SureTalk.com,
including, without limitation, customer or supplier requirements, notes,
drawings, writings, designs, plans, specifications, records, charts, methods,
procedures, systems, price lists, financial data, records, and customer or
supplier lists (collectively "Confidential Information"). Accordingly, except as
permitted or required in the performance of his duties for the Company, Employee
agrees not to disclose, divulge, make public, utilize, communicate or use,
whether for his own benefit or for the benefit of others, either directly or
indirectly, any Confidential Information of or relating to the Company or
SureTalk.com unless specifically authorized in writing by the Company to do so.
<PAGE>

                  (2)  Employee shall promptly communicate and disclose to the
Company all information, inventions, improvements, discoveries, knowhow,
methods, techniques, processes, observations and data ("Proprietary
Information") obtained, developed, invented or otherwise discovered by him in
the course of this employment. All written materials, records, computer programs
or data and documents made by Employee or coming into his possession during the
employment period concerning any Proprietary Information used or developed by
the Company, SureTalk.com or Employee shall be the sole exclusive property of
the Company. Employee shall have no right, title or interest therein
notwithstanding that he may have purchased the medium on which such Proprietary
Information is recorded.

                  (3)  Upon Termination of employment, Employee shall not take
with him any of the Confidential Information or Proprietary Information. Upon
such Termination, or at any time upon the request of the Company, Employee shall
promptly deliver all Confidential Information and Proprietary Information, and
all copies thereof, to the Company with no cost or charge to it. Upon request by
the Company, Employee shall promptly execute and deliver any documents necessary
or convenient to evidence ownership of the Confidential Information and
Proprietary Information by the Company, or the transfer and assignment of the
Confidential Information and Proprietary Information to it without cost or
charge.

                  (4)  Employee acknowledges that if he should violate any
provision of this Section 7, the Company will have no adequate remedy at law. In
such event, the Company shall have the right, in addition to any other rights it
may have, to specific performance of this Agreement.

                  (5)  The provisions of this Section 7 shall survive any
Termination of this Agreement. The provisions of this Section 7 are not limited
as to duration or geographic scope.

                  (6)  NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS
SECTION 7, EMPLOYEE IS HEREBY NOTIFIED BY THE COMPANY THAT SUCH PROVISIONS DO
NOT APPLY TO ANY INVENTION THAT QUALIFIES FULLY UNDER THE PROVISIONS OF SECTION
2870 OF THE CALIFORNIA LABOR CODE. BY HIS SIGNATURE BELOW, EMPLOYEE HEREBY
ACKNOWLEDGES RECEIPT OF SUCH NOTIFICATION.

      8.  BENEFIT AND BINDING EFFECT.  This Agreement shall inure to the
          ---------------------------
benefit of and be binding upon the Company, its successors and assigns,
including but not limited to any corporation, person or other entity which may
acquire all or substantially all of the assets, shares or business of the
Company or any corporation with or into which it may be consolidated or merged.
The rights and obligations of Employee hereunder may not be delegated or
assigned.

      9.  COUNTERPARTS.  This Agreement may be executed in counterparts, each of
          ------------
which shall be deemed an original but all of which shall constitute one and the
same instrument.

     10.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
          -------------
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO THE
CHOICE OF LAW PRINCIPLES THEREOF.
<PAGE>

     11.  ENTIRE AGREEMENT.  This Agreement (including the other agreements
          -----------------
referred to herein) sets forth and is an integration of all of the promises,
agreements, conditions and understandings among the parties hereto with respect
to all matters contained or referred to herein, and all prior promises,
agreements, conditions, understandings, warranties or representations, oral,
written, express or implied, are hereby superseded and merged herein.

     12.  VALIDITY OF PROVISIONS.  Should any provision(s) of this Agreement
          -----------------------
be void or unenforceable in whole or in part, the remainder of this Agreement
shall not in any way be affected thereby, and such provision(s) shall be
modified or amended so as to provide for the accomplishment of the provision(s)
and intentions of this Agreement to the maximum extent possible.

     13.  MODIFICATIONS OR DISCHARGE.  This Agreement shall not be deemed
          ---------------------------
waived, changed, modified, discharged or terminated in whole or in part, except
as expressly provided for herein or by written instrument signed by the party or
parties to be charged therewith.

     14.  NOTICES.  Any notice which any party may wish to give to the other
          --------
party hereunder shall be deemed to have been given when delivered to the party
to whom it is addressed. Notices hereunder may be sent by courier, mail, telefax
or telegram, to the following addresses, or to such other addresses as the
parties may from time to time furnish to each other by like notice:

          To:  JFAX.COM, Inc.
               10960 Wilshire Boulevard, Ste. 500
               Los Angeles, California  90024
               Attention:  Richard Ressler and Nicholas V. Morosoff
               Telefax:      (310) 966-1651

          To:  Employee:
               Steven J. Hamerslag
               P.O. Box 730
               17501 Via de Fortuna
               Rancho Santa Fe, California 92067
               Telefax:  (760) 688-1002

     15.  NUMBER; GENDER.  In this Agreement, the masculine shall include the
          ---------------
feminine and neuter and vice versa, and the singular shall include the plural
and vice versa, as the context may reasonably require or permit.

     16.  EMPLOYMENT REGULATIONS.  Applicable employment regulations require
          -----------------------
that Employee complete a Form W-4 and Form I-9 upon employment providing
verification of his legal right to work in the United States, which Employee
agrees to complete.
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                JFAX.COM, INC.

                                By: /s/ Richard S. Ressler
                                    -------------------------
                                    Name:  Richard S. Ressler
                                    Title: Chairman

                                STEVEN J. HAMERSLAG

                                /s/ Steven J. Hamerslag
                                -----------------------

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