EXHIBIT 10.2

SUMMARY OF 2005 SUPPLEMENTAL INCENTIVE COMPENSATION PLAN

On April 25, 2005, the Compensation Committee of the Board of Directors of Talk
America Holdings, Inc. (the “Company”) adopted a supplemental incentive
compensation plan for a limited number of employees of the Company and its
subsidiaries who are designated as participants by the Compensation Committee.
Under this plan, the participating employees are organized in groups on a
cross-functional basis and charged with the responsibility for improving and
monitoring the following operational areas: customer satisfaction, general and
administrative expenses, credit quality, gross margin, internet services,
network migration and market share. Incentive compensation under this plan is
based upon the achievement of certain operational performance measures
established by the Compensation Committee when it adopted the plan. Maximum
incentive compensation per employee for each cross-function team is $4,000 per
six-month period, with an aggregate six-month cap of $8,000. The Company’s
executive officers, other than its Chief Executive Officer and President, are
entitled to participate in this incentive plan.