CENTURYTEL, INC.
                   2005 MANAGEMENT INCENTIVE COMPENSATION PLAN
 
      1. PURPOSE. The purpose of the 2005 Management Incentive Compensation Plan
(this "Plan") of CenturyTel, Inc. ("CenturyTel") is to increase shareholder
value and to advance the interests of CenturyTel and its subsidiaries
(collectively, the "Company") by furnishing a variety of equity incentives (the
"Incentives") designed to attract, retain and motivate officers, employees,
consultants and advisors and to strengthen the mutuality of interests between
such persons and CenturyTel's shareholders. Incentives may consist of options to
purchase shares of CenturyTel's common stock, $1.00 par value per share (the
"Common Stock"), stock appreciation rights, shares of restricted stock,
restricted stock units or other stock-based awards the value of which is based
upon the value of the Common Stock, all on terms determined under this Plan. As
used in this Plan, the term "subsidiary" means any corporation, limited
liability company or other entity of which CenturyTel owns (directly or
indirectly) within the meaning of Section 424(f) of the Internal Revenue Code of
1986, as amended (the "Code"), 50% or more of the total combined voting power of
all classes of stock, membership interests or other equity interests issued
thereby.
 
      2. ADMINISTRATION.
 
            2.1 COMPOSITION. This Plan shall be administered by the compensation
      committee of the Board of Directors of CenturyTel, or by a subcommittee of
      the compensation committee. The committee or subcommittee that administers
      this Plan shall hereinafter be referred to as the "Committee." The
      Committee shall consist of not fewer than two members of the Board of
      Directors, each of whom shall (a) qualify as a "non-employee director"
      under Rule 16b-3 under the Securities Exchange Act of 1934 (the "1934
      Act"), or any successor rule, and (b) qualify as an "outside director"
      under Section 162(m) of the Code and the regulations thereunder
      (collectively, "Section 162(m)").
 
            2.2 AUTHORITY. The Committee shall have authority to award
      Incentives under this Plan, to interpret this Plan, to establish any rules
      or regulations relating to this Plan that it determines to be appropriate,
      to enter into agreements with or provide notices to participants as to the
      terms of the Incentives (the "Incentive Agreements") and to make any other
      determination that it believes necessary or advisable for the proper
      administration of this Plan. Its decisions concerning matters relating to
      this Plan shall be final, conclusive and binding on the Company and
      participants. The Committee may delegate its authority hereunder to the
      extent provided in Section 3 hereof. The Committee shall not have
      authority to award Incentives under this Plan to directors in their
      capacities as such.
 
      3. ELIGIBLE PARTICIPANTS. Employees and officers of the Company (including
officers who also serve as directors of the Company) and consultants and
advisors to the Company shall become eligible to receive Incentives under this
Plan when designated by the Committee. Employees may be designated individually
or by groups or categories, as the Committee deems appropriate. With respect to
participants not subject to Section 16 of the 1934 Act or Section 162(m), (i)
the Committee may delegate to the chief executive officer of
 
CenturyTel its authority to designate participants, to determine the type, size
and terms of the Incentives to be received by these participants, to determine
any performance objectives for these participants and to approve or authorize
the form of Incentive Agreement governing such Incentives and (ii) following any
grants of Incentives pursuant to such delegated authority, the chief executive
officer of CenturyTel or any officer designated by him may exercise any powers
of the Committee under this Plan to accelerate vesting or exercise periods, to
terminate restricted periods, to waive compliance with specified provisions or
to otherwise make determinations contemplated hereunder with respect to such
Incentives; provided, however, that in no event may (A) the chief executive
officer grant stock options at an exercise price other than the Fair Market
Value of a share of Common Stock on the later of the date of grant or the date
the participant commences employment with the Company, unless otherwise
determined by the Committee (subject to the limitations in Section 5.1), (B) any
person other than the Committee make any of the determinations set forth in
Section 4.5, 11.11 or Section 11.12 of this Plan, or (C) any person take any
action that the Committee lacks the authority to take hereunder.
 
      4. SHARES SUBJECT TO THIS PLAN. The shares of Common Stock with respect to
which Incentives may be granted under this Plan shall be subject to the
following:
 
            4.1 TYPE OF COMMON STOCK. The shares of Common Stock with respect to
      which Incentives may be granted under this Plan may be currently
      authorized but unissued shares or shares currently held or subsequently
      acquired by the Company as treasury shares, including shares purchased in
      the open market or in private transactions.
 
            4.2 MAXIMUM NUMBER OF SHARES. Subject to the other provisions of
      this Section 4, the maximum number of shares of Common Stock that may be
      delivered to participants and their beneficiaries under this Plan shall be
      4,000,000 shares of Common Stock.
 
            4.3 SHARE COUNTING. To the extent any shares of Common Stock covered
      by an Incentive are not delivered to a participant or beneficiary because
      the Incentive is forfeited or canceled, or the shares of Common Stock are
      not delivered because the Incentive is paid or settled in cash, such
      shares shall not be deemed to have been delivered for purposes of
      determining the maximum number of shares of Common Stock available for
      delivery under Section 4.2 or 4.4(c) of this Plan. In the event that
      shares of Common Stock are issued as Incentives and thereafter are
      forfeited or reacquired by the Company pursuant to rights reserved upon
      issuance thereof, such forfeited and reacquired Shares may again be issued
      under this Plan. All shares to which a stock appreciation right relates
      (not only the net shares) shall be counted against the shares issuable
      through the Plan, except as otherwise provided above.
 
            4.4 LIMITATIONS ON NUMBER OF SHARES. Subject to Section 4.5, the
      following additional limitations are imposed under this Plan:
 
                  (a) The maximum number of shares of Common Stock that may be
            issued upon exercise of stock options intended to qualify as
            incentive stock options under Section 422 of the Code shall be
            4,000,000 shares.
                  (b) The maximum number of shares of Common Stock that may be
            covered by Incentives granted under this Plan to any one individual
            during any one calendar-year period shall be 600,000.
 
                  (c) The maximum number of shares of Common Stock that may be
            issued as restricted stock, restricted stock units, or Other
            Stock-Based Awards (as defined below) shall be 2,000,000 shares.
            Such Incentives shall be subject to the minimum vesting periods
            provided herein, with respect to restricted stock, restricted stock
            units and Other Stock-Based Awards, except that restricted stock,
            restricted stock units and Other Stock-Based Awards with respect to
            an aggregate of 200,000 shares of Common Stock may be granted
            without compliance with the minimum vesting periods provided in
            Sections 6.2, 7.2 and 9.2.
 
                  (d) If, after shares have been earned under an Incentive, the
            delivery is deferred, any additional shares attributable to
            dividends paid during the deferral period shall be disregarded for
            purposes of the limitations of this Section 4.
 
            4.5 ADJUSTMENT.
 
                  (a) In the event of any recapitalization, reclassification,
            stock dividend, stock split, combination of shares or other change
            in the Common Stock, all limitations on numbers of shares of Common
            Stock provided in this Section 4 and the number of shares of Common
            Stock subject to outstanding Incentives shall be equitably adjusted
            in proportion to the change in outstanding shares of Common Stock.
            In addition, in the event of any such change in the Common Stock,
            the Committee shall make any other adjustment that it determines to
            be equitable, including adjustments to the exercise price of any
            option or the base price of any stock appreciation right and any per
            share performance objectives of any Incentive in order to provide
            participants with the same relative rights before and after such
            adjustment.
 
                  (b) If the Company merges, consolidates, sells all of its
            assets or dissolves and such transaction is not a Change of Control,
            as defined in Section 11.12 (each of the foregoing a "Fundamental
            Change"), then thereafter upon any exercise or payout of an
            Incentive theretofore granted the participant shall be entitled to
            receive (i) in lieu of shares of Common Stock previously issuable
            thereunder, the number and class of shares of stock and securities
            to which the participant would have been entitled pursuant to the
            terms of the Fundamental Change if, immediately prior to such
            Fundamental Change, the participant had been the holder of record of
            the number of shares of Common Stock subject to such Incentive or
            (ii) in lieu of payments based upon Common Stock previously payable
            thereunder, payments based on any formula that the Committee
            determines to be equitable in order to provide participants with
            substantially equivalent rights before and after the Fundamental
            Change. In the event any such Fundamental Change causes a change in
            the outstanding Common Stock, the aggregate number of shares
            available under the Plan may be appropriately
 
            adjusted by the Committee in its sole discretion, whose
            determination shall be conclusive.
 
      5. STOCK OPTIONS. The Committee may grant incentive stock options (as such
term is defined in Section 422 of the Code) or non-qualified stock options. Any
option that is designated as a non-qualified stock option shall not be treated
as an incentive stock option. Each stock option granted by the Committee under
this Plan shall be subject to the following terms and conditions:
 
            5.1 PRICE. The exercise price per share shall be determined by the
      Committee, subject to adjustment under Section 4.5; provided that in no
      event shall the exercise price be less than the Fair Market Value (as
      defined below) of a share of Common Stock on the date of grant, except in
      the case of a stock option granted in assumption of or in substitution for
      an outstanding award of a company acquired by the Company or with which
      the Company combines.
 
            5.2 NUMBER. The number of shares of Common Stock subject to the
      option shall be determined by the Committee, subject to the limitations
      and adjustments provided in Section 4 hereof.
 
            5.3 DURATION AND TIME FOR EXERCISE. Subject to earlier termination
      as provided in Sections 11.4 and 11.12, the term of each stock option
      shall be determined by the Committee, but may not exceed ten years. Each
      stock option shall become exercisable at such time or times during its
      term as shall be determined by the Committee. The Committee may accelerate
      the exercisability of any stock option at any time.
 
            5.4 CONDITIONS TO EXERCISE. The Committee may, in its discretion,
      provide that a stock option cannot be exercised unless one or more
      performance goals are achieved, including any of those specified in
      Section 10.
 
            5.5 MANNER OF EXERCISE.
 
                  (a) A stock option may be exercised, in whole or in part, by
            giving written notice to the Company, specifying the number of
            shares of Common Stock to be purchased. The exercise notice shall be
            accompanied by tender of the full purchase price for such shares,
            which may be paid or satisfied by (i) cash; (ii) check; (iii)
            delivery of shares of Common Stock, which shares shall be valued for
            this purpose at the Fair Market Value on the business day
            immediately preceding the date such option is exercised and, unless
            otherwise determined by the Committee, shall have been held by the
            optionee for at least six months; (iv) delivery of irrevocable
            written instructions to a broker approved by the Company (with a
            copy to the Company) to immediately sell a portion of the shares
            issuable under the option and to deliver promptly to the Company the
            amount of sale proceeds (or loan proceeds if the broker lends funds
            to the participant for delivery to the Company) to pay the exercise
            price; (v) in such other manner as may be authorized from time to
            time by the Committee; or (vi) any combination of the
 
            preceding, equal in value to the full amount of the exercise price;
            provided that all such payments shall be made or denominated in
            United States dollars.
 
                  (b) Notice under the preceding paragraph may be delivered by
            telecopy, electronic mail or any similar form of transmission,
            provided that the exercise price of such shares is received by the
            Company via wire transfer or other means on or before the day such
            transmission is received by the Company. The notice shall specify
            the manner in which the certificates for such shares are to be
            delivered.
 
                  (c) An option to purchase shares of Common Stock in accordance
            with this Plan shall be deemed to have been exercised immediately
            prior to the close of business on the first business date on which
            the Company has received both (i) written notice of such exercise
            and (ii) payment in full of the exercise price for the number of
            shares for which options are being exercised.
 
                  (d) In the case of delivery of an uncertified check, no shares
            shall be issued until the check has been paid in full.
 
                  (e) Prior to the issuance of shares of Common Stock upon the
            exercise of a stock option, a participant shall have no rights as a
            shareholder.
 
            5.6 REPRICING. Except for adjustments pursuant to Section 4.5 or
      actions permitted to be taken by the Committee under Section 11.12(c) in
      the event of a Change of Control, unless approved by the shareholders of
      the Company, (a) the exercise price for any outstanding option granted
      under this Plan may not be decreased after the date of grant and (b) an
      outstanding option that has been granted under this Plan may not, as of
      any date that such option has an exercise price that is greater than the
      then current Fair Market Value of a share of Common Stock, be surrendered
      to the Company as consideration for anything of value, including the grant
      of a new option with a lower exercise price, another Incentive, a cash
      payment or Common Stock.
 
            5.7 INCENTIVE STOCK OPTIONS. Notwithstanding anything in this Plan
      to the contrary, the following additional provisions shall apply to the
      grant of stock options that are intended to qualify as incentive stock
      options.
 
                  (a) Any incentive stock option authorized under this Plan
            shall contain such other provisions as the Committee shall deem
            advisable, but shall in all events be consistent with and contain or
            be deemed to contain all provisions required in order to qualify the
            options as incentive stock options;
 
                  (b) All incentive stock options must be granted within ten
            years from the date on which this Plan was adopted by the Board of
            Directors;
 
                  (c) No incentive stock option shall be granted to any
            participant who, at the time such option is granted, would own
            (within the meaning of Section 422 of the Code) stock possessing
            more than 10% of the total combined voting power
 
 
            of all classes of stock of the corporation that employs such
            participant or its parent or subsidiary corporation; and
 
                  (d) The aggregate Fair Market Value (determined with respect
            to each incentive stock option as of the time such incentive stock
            option is granted) of the Common Stock with respect to which
            incentive stock options are exercisable for the first time by a
            participant during any calendar year (under this Plan or any other
            plan of the Company) shall not exceed $100,000. To the extent that
            such limitation is exceeded, such options shall not be treated, for
            federal income tax purposes, as incentive stock options.
 
      6. RESTRICTED STOCK.
 
            6.1 GRANT OF RESTRICTED STOCK. An award of restricted stock may be
      subject to the attainment of specified performance goals or targets,
      restrictions on transfer, forfeitability provisions and such other terms
      and conditions as the Committee may determine, subject to the provisions
      of this Plan. To the extent restricted stock is intended to qualify as
      "performance-based compensation" under Section 162(m), it must be granted
      subject to the attainment of performance goals as described in Section 10
      and meet the additional requirements by imposed by Section 162(m).
 
            6.2 RESTRICTED PERIOD. At the time an award of restricted stock is
      made, the Committee shall establish a period of time during which the
      transfer of the shares of restricted stock shall be restricted (the
      "Restricted Period"). Each award of restricted stock may have a different
      Restricted Period. Except as provided in Section 4.4(c), a Restricted
      Period of at least three years is required, except that if vesting of the
      shares is subject to the attainment of specified performance goals, the
      Restricted Period may be one year or more. Incremental periodic vesting of
      portions of the award during the Restricted Period is permitted. Unless
      otherwise provided in the Incentive Agreement, the Committee may in its
      discretion declare the Restricted Period terminated upon a participant's
      death, disability, retirement or other termination by the Company and
      permit the sale or transfer of the restricted stock. The expiration of the
      Restricted Period shall also occur as provided under Section 11.12 upon a
      Change of Control of the Company.
 
            6.3 ESCROW. The participant receiving restricted stock shall enter
      into an Incentive Agreement with the Company setting forth the conditions
      of the grant. Certificates representing shares of restricted stock shall
      be registered in the name of the participant and deposited with the
      Company, together with a stock power endorsed in blank by the participant.
      Each such certificate shall bear a legend in substantially the following
      form:
 
            The transferability of this certificate and the shares of Common
            Stock represented by it is subject to the terms and conditions
            (including conditions of forfeiture) contained in the CenturyTel,
            Inc. 2005 Management Incentive Compensation Plan (the "Plan") and an
            agreement entered into between the registered owner and CenturyTel,
            Inc.
 
            thereunder. Copies of this Plan and the agreement are on file and
            available for inspection at the principal office of the Company.
 
            6.4 DIVIDENDS ON RESTRICTED STOCK. Any and all cash and stock
      dividends paid with respect to the shares of restricted stock shall be
      subject to any restrictions on transfer, forfeitability provisions or
      reinvestment requirements as the Committee may, in its discretion,
      prescribe in the Incentive Agreement.
 
            6.5 FORFEITURE. In the event of the forfeiture of any shares of
      restricted stock under the terms provided in the Incentive Agreement
      (including any additional shares of restricted stock that may result from
      the reinvestment of cash and stock dividends, if so provided in the
      Incentive Agreement), such forfeited shares shall be surrendered and the
      certificates cancelled. The participants shall have the same rights and
      privileges, and be subject to the same forfeiture provisions, with respect
      to any additional shares received pursuant to Section 4.5 due to a
      recapitalization, stock split or other change in capitalization described
      therein.
 
            6.6 EXPIRATION OF RESTRICTED PERIOD. Upon the expiration or
      termination of the Restricted Period and the satisfaction of any other
      conditions prescribed by the applicable Incentive Agreement or at such
      earlier time as provided for in Section 6.2, the restrictions applicable
      to the restricted stock shall lapse and a stock certificate for the number
      of shares of restricted stock with respect to which the restrictions have
      lapsed shall be delivered, free of all such restrictions and legends other
      than those required by law, to the participant or the participant's
      estate, as the case may be.
 
            6.7 RIGHTS AS A SHAREHOLDER. Subject to the restrictions imposed
      under the terms and conditions of this Plan and subject to any other
      restrictions that may be imposed in the Incentive Agreement, each
      participant receiving restricted stock shall have all the rights of a
      shareholder with respect to shares of Common Stock during any period in
      which such shares are subject to forfeiture and restrictions on transfer,
      including the right to vote such shares.
 
      7. RESTRICTED STOCK UNITS.
 
            7.1 GRANT OF RESTRICTED STOCK UNITS. A restricted stock unit, or
      RSU, represents the right to receive from the Company on the scheduled
      vesting date or other specified payment date for such RSU, one share of
      Common Stock. An award of restricted stock units may be subject to the
      attainment of specified performance goals or targets, forfeitability
      provisions and such other terms and conditions as the Committee may
      determine, subject to the provisions of this Plan. To the extent an award
      of restricted stock units is intended to qualify as "performance-based
      compensation" under Section 162(m), it must be granted subject to the
      attainment of performance goals as described in Section 10 and meet the
      additional requirements imposed by Section 162(m).
 
            7.2 VESTING PERIOD. At the time an award of restricted stock units
      is made, the Committee shall establish a period of time during which the
      restricted stock units shall vest (the "Vesting Period"). Each award of
      restricted stock units may have a
      different Vesting Period. Except as provided in Section 4.4(c), a Vesting
      Period of at least three years is required, except that if vesting of the
      RSUs is subject to the attainment of specified performance goals, the
      Vesting Period may be one year or more. Incremental periodic vesting of
      portions of the award during the Vesting Period is permitted. The
      acceleration of the expiration of the Vesting Period shall occur as
      provided under Section 11.12(b) upon a Change of Control of the Company
      and may also occur as provided under Section 11.4 in the event of
      termination of employment under the circumstances provided in the
      Incentive Agreement.
 
            7.3 DIVIDEND EQUIVALENT ACCOUNTS. Subject to the terms and
      conditions of this Plan and the applicable Incentive Agreement, as well as
      any procedures established by the Committee, prior to the expiration of
      the applicable Vesting Period of an RSU granted to a participant
      hereunder, the Company shall establish an account for the participant and
      deposit into that account any securities, cash or other property
      comprising any dividend or property distribution with respect to the
      shares of Common Stock underlying the RSU. The participant shall have no
      rights to the amounts or other property in such account until the
      applicable RSU vests.
 
            7.4 RIGHTS AS A SHAREHOLDER. Each participant receiving restricted
      stock units shall have no rights as a shareholder with respect to such
      restricted stock units until such time as shares of Common Stock are
      issued to the participant.
 
      8. STOCK-SETTLED STOCK APPRECIATION RIGHTS.
 
            8.1 GRANT OF STOCK-SETTLED STOCK APPRECIATION RIGHTS. A
      stock-settled stock appreciation right, or SAR, is a right to receive,
      without payment to the Company, a number of shares of Common Stock, the
      number of which is determined pursuant to the formula set forth in Section
      8.5. Each SAR granted by the Committee under the Plan shall be subject to
      the terms and conditions provided in this Section 8:
 
            8.2 NUMBER. Each SAR granted to any participant shall relate to such
      number of shares of Common Stock as shall be determined by the Committee,
      subject to adjustment as provided in Section 4.5.
 
            8.3 DURATION. The term of each SAR shall be determined by the
      Committee, but shall not exceed a maximum term of 10 years. The Committee
      may in its discretion accelerate the exercisability of any SAR at any time
      in its discretion.
 
            8.4 EXERCISE. A SAR may be exercised, in whole or in part, by giving
      written notice to the Company, specifying the number of SARs which the
      holder wishes to exercise. The date that the Company receives such written
      notice shall be referred to herein as the "Exercise Date." The Company
      shall, within 30 days of an Exercise Date, deliver to the exercising
      holder certificates for the shares of Common Stock to which the holder is
      entitled pursuant to Section 8.5
 
            8.5 PAYMENT. The number of shares of Common Stock which shall be
      issuable upon the exercise of a SAR shall be determined by dividing:
 
                  (a) the number of shares of Common Stock as to which the SAR
            is exercised, multiplied by the amount of the appreciation in each
            such share (for this purpose, the "appreciation" shall be the amount
            by which the Fair Market Value of the Common Stock subject to the
            SAR on the business day preceding the Exercise Date exceeds the
            "Base Price," which is an amount, not less than the Fair Market
            Value of a share of Common Stock on the date of grant, which shall
            be determined by the Committee at the time of grant, subject to
            adjustment under Section 4.5); by
 
                  (b) the Fair Market Value of a share of Common Stock on the
            Exercise Date.
 
            8.6 NO FRACTIONAL SHARES. No fractional shares of Common Stock shall
      be issued upon the exercise of a SAR. In lieu thereof, the holder of a SAR
      shall be entitled to purchase the portion necessary to make a whole share
      at its Fair Market Value on the Exercise Date.
 
            8.7 REPRICING. Except for adjustments pursuant to Section 4.5 or
      actions permitted to be taken by the Committee under Section 11.12(c) in
      the event of a Change of Control, unless approved by the shareholders of
      the Company, (a) the Base Price for any outstanding SAR granted under this
      Plan may not be decreased after the date of grant and (b) an outstanding
      SAR that has been granted under this Plan may not, as of any date that
      such SAR has a per share Base Price that is greater than the then current
      Fair Market Value of a share of Common Stock, be surrendered to the
      Company as consideration for anything of value, including the grant of a
      new SAR with a lower Base Price, another Incentive, a cash payment or
      Common Stock.
 
      9. OTHER STOCK-BASED AWARDS.
 
            9.1 GRANT OF OTHER STOCK-BASED AWARDS. Subject to the limitations
      described in Section 9.2 hereof, the Committee may grant to eligible
      participants "Other Stock-Based Awards," which shall consist of awards,
      other than options, restricted stock, restricted stock units or SARs
      provided for in Sections 5 through 8, the value of which is based in whole
      or in part on the value of shares of Common Stock. Other Stock-Based
      Awards may be awards of shares of Common Stock or may be denominated or
      payable in, valued in whole or in part by reference to, or otherwise based
      on or related to, shares of, or appreciation in the value of, Common Stock
      (including securities convertible or exchangeable into or exercisable for
      shares of Common Stock), as deemed by the Committee consistent with the
      purposes of this Plan. The Committee shall determine the terms and
      conditions of any Other Stock-Based Award (including which rights of a
      shareholder, if any, the recipient shall have with respect to Common Stock
      associated with any such award) and may provide that such award is payable
      in whole or in part in cash. An Other Stock-Based Award may be subject to
      the attainment of such specified performance goals or targets as the
      Committee may determine, subject to the provisions of this Plan. To the
      extent that an Other Stock-Based Award is intended to qualify as
      "performance-based compensation" under Section 162(m), it must be granted
      subject to
 
      the attainment of performance goals as described in Section 10 and meet
      the additional requirements imposed by Section 162(m).
 
            9.2 VESTING TERMS. Except as otherwise provided in Section 4.4(c),
      other Stock-Based Awards granted under this Section 9 shall be subject to
      a vesting period of at least three years, except that if vesting of the
      award is subject to the attainment of specified performance goals, a
      minimum vesting period of one year is allowed. Incremental periodic
      vesting of portions of the award over the required vesting period is
      permitted.
 
      10. SECTION 162(m) AWARDS. To the extent that shares of restricted stock,
restricted stock units or Other Stock-Based Awards granted under the Plan are
intended to qualify as "performance-based compensation" under Section 162(m),
the vesting, grant or payment of such awards shall be conditioned on the
achievement of one or more performance goals and must satisfy the other
requirements of Section 162(m). The performance goals pursuant to which such
awards shall vest, be granted or be paid out shall be any or a combination of
the following performance measures applied to the Company or one or more of its
divisions, subsidiaries or lines of business: return on equity, cash flow,
assets or investment; shareholder return; changes in revenues, operating income,
cash flow, cash provided by operating activities, earnings or earnings per
share; customer growth; customer satisfaction or an economic value added
measure. The performance goals may be subject to such adjustments as are
specified in advance by the Committee, including adjustments made pursuant to
written guidelines that are approved or confirmed in advance by the Committee.
For any performance period, the performance objectives may be measured on an
absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or industry benchmarks, or relative to
levels attained in prior years.
 
      11. GENERAL.
 
            11.1 DURATION. No Incentives may be granted under the Plan later
      than May 1, 2015; provided, however, that Incentives granted prior to such
      date shall remain in effect until (i) all such Incentives granted under
      this Plan have either been satisfied by the issuance of shares of Common
      Stock or the payment of cash or been terminated under the terms of this
      Plan or the applicable Incentive Agreement and (ii) all restrictions
      imposed on shares of Common Stock in connection with their issuance under
      this Plan have lapsed.
 
            11.2 TRANSFERABILITY OF INCENTIVES. (a) No Incentive granted
      hereunder may be transferred, pledged, assigned or otherwise encumbered by
      the holder thereof except:
 
                  (i) by will;
 
                  (ii) by the laws of descent and distribution; or
 
                  (iii) pursuant to a domestic relations order, as defined in
            the Code; or
 
                  (iv) in the case of stock options only, if permitted by the
            Committee and so provided in the Incentive Agreement, (A) to
            Immediate Family Members (as defined below), (B) to a partnership in
            which the participant and/or Immediate Family Members, or entities
            in which the participant and/or Immediate Family Members are the
            sole owners, members or beneficiaries, as appropriate, are the sole
            partners, (C) to a limited liability company in which the
            participant and/or Immediate Family Members, or entities in which
            the participant and/or Immediate Family Members are the sole owners,
            members or beneficiaries, as appropriate, are the sole members, or
            (D) to a trust for the sole benefit of the participant and/or
            Immediate Family Members. "Immediate Family Members" means the
            spouse and natural or adopted children or grandchildren of the
            participant and their respective spouses. To the extent that an
            incentive stock option is permitted to be transferred during the
            lifetime of the participant, it shall be treated thereafter as a
            non-qualified stock option.
 
                  (b) No such transfer of any Incentive under paragraph (a)
            shall be effective to bind the Company unless the Company shall have
            been furnished with written notice thereof and a copy of such
            evidence as the Committee may deem necessary to establish the
            validity of the transfer and the acceptance by the transferee or
            transferees of the terms and conditions of this Plan and the
            applicable Incentive Agreement.
 
                  (c) Any attempted assignment, transfer, pledge, hypothecation
            or other disposition of an Incentive, or levy of attachment or
            similar process upon the Incentive not specifically permitted
            herein, shall be null and void and without effect.
 
            11.3 DIVIDEND EQUIVALENTS. In the sole and complete discretion of
      the Committee, an Incentive may provide the holder thereof with dividends
      or dividend equivalents, payable in cash, shares, other securities or
      other property on a current or deferred basis.
 
            11.4 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. In the event that
      a participant ceases to be an employee of the Company for any reason,
      including death, disability, early retirement or normal retirement, any
      outstanding Incentives then held by such participant may be exercised, may
      vest or may expire at such times or in such manner as is set forth in the
      Incentive Agreement. In its discretion, the Committee may resolve any
      questions under this Plan or any Incentive Agreement as to whether and
      when there has been a termination of employment and the cause or nature of
      such termination.
 
            11.5 ADDITIONAL CONDITIONS. Anything in this Plan to the contrary
      notwithstanding:
 
                  (a) the Company may, if it shall determine it necessary or
            desirable for any reason, at the time of award of any Incentive or
            the issuance of any shares of
 
 
            Common Stock pursuant to any Incentive, require the recipient of the
            Incentive, as a condition to the receipt thereof or to the receipt
            of shares of Common Stock issued pursuant thereto, to deliver to the
            Company a written representation of present intention to acquire the
            Incentive or the shares of Common Stock issued pursuant thereto for
            his own account for investment and not for distribution; and
 
                  (b) if at any time the Company further determines, in its sole
            discretion, that the listing, registration or qualification (or any
            updating of any such document) of any Incentive or the shares of
            Common Stock issuable pursuant thereto is necessary on any
            securities exchange or under any federal or state securities or blue
            sky law, or that the consent or approval of any governmental
            regulatory body is necessary or desirable as a condition of, or in
            connection with the award of any Incentive, the issuance of shares
            of Common Stock pursuant thereto, or the removal of any restrictions
            imposed on such shares, such Incentive shall not be awarded or such
            shares of Common Stock shall not be issued or such restrictions
            shall not be removed, as the case may be, in whole or in part,
            unless such listing, registration, qualification, consent or
            approval shall have been effected or obtained free of any conditions
            not acceptable to the Company.
 
            11.6 INCENTIVE AGREEMENTS. An Incentive under this Plan shall be
      subject to such terms and conditions, not inconsistent with this Plan, as
      the Committee may, in its sole discretion, prescribe and set forth in the
      Incentive Agreement. Such terms and conditions may provide for the
      forfeiture of an Incentive or the gain associated with an Incentive under
      certain circumstances to be set forth in the Incentive Agreement,
      including if the participant competes with the Company or engages in other
      activities that are harmful to the Company. In connection with all grants
      of Incentives under this Plan, the Committee shall authorize and approve a
      form of Incentive Agreement governing the terms and conditions of such
      Incentive that apply to all similarly-situated award recipients, and cause
      the Company to prepare an individual agreement with or notice to each
      award recipient that reflects the actual number of shares of Common Stock
      to which the Incentive of such recipient relates. A copy of such document
      shall be provided to each such award recipient, and the Committee may, but
      need not, require that such award recipient duly execute and deliver to
      the Company a copy of such document as a condition precedent to the
      effectiveness of the grant of the Incentive. Such document is referred to
      in this Plan as an "Incentive Agreement" regardless of whether a
      participant's signature is required.
 
            11.7 WITHHOLDING.
 
                  (a) The Company shall have the right to withhold from any
            payments or stock issuances under this Plan, or to collect as a
            condition of payment, any taxes required by law to be withheld.
 
                  (b) If so provided in the applicable Incentive Agreement, a
            participant will have the right to satisfy his or her withholding
            tax obligation in whole or in part by electing (an "Election") to
            deliver currently owned shares of Common Stock or to have the
            Company withhold from the shares the participant otherwise
 
            would receive shares of Common Stock having a value equal to the
            minimum amount required to be withheld, with the value of the shares
            to be delivered or withheld being based on the Fair Market Value of
            the Common Stock on the date that the amount of tax to be withheld
            is determined (the "Tax Date"). Each Election must be made prior to
            the Tax Date. Notwithstanding anything to the contrary in this Plan
            or any Incentive Agreement, the Committee may disapprove of any
            Election or suspend or terminate the right to make Elections.
 
            11.8 NO CONTINUED EMPLOYMENT. No participant under this Plan shall
      have any right, because of his or her participation, to continue in the
      employ of the Company for any period of time or to any right to continue
      his or her present or any other rate of compensation.
 
            11.9 DEFERRAL PERMITTED. Payment of cash or distribution of any
      shares of Common Stock to which a participant is entitled under any
      Incentive shall be made as provided in the Incentive Agreement. Payment
      may be deferred at the option of the participant if provided in the
      Incentive Agreement.
 
            11.10 AMENDMENT OR DISCONTINUANCE OF THIS PLAN. The Board may amend
      or discontinue this Plan at any time; provided, however, that no such
      amendment may:
 
                  (a) without the approval of the shareholders, (i) increase,
            subject to adjustments permitted herein, the maximum number of
            shares of Common Stock that may be issued through this Plan, (ii)
            materially increase the benefits accruing to participants under this
            Plan, (iii) materially expand the classes of persons eligible to
            participate in this Plan, (iv) materially expand the types of awards
            available for grant under the Plan, (v) amend Section 11.1 to permit
            grants of Incentives hereunder later than May 1, 2015, (vi)
            materially change the method of determining the Base price of
            options or the Base Price of SARs, or (vii) amend Section 5.6 or 8.7
            to permit repricing of options or SARs, respectively, or
 
                  (b) materially impair, without the consent of the recipient,
            an Incentive previously granted, except (i) as otherwise provided in
            Section 11.16 and (ii) that the Company retains all rights to take
            action under Section 11.12 and to include in Incentive Agreements
            provisions authorizing the Committee in its discretion to cancel
            unvested or unexercisable Incentives.
 
            11.11 DEFINITION OF FAIR MARKET VALUE. Whenever the "Fair Market
      Value" of Common Stock or some other specified security must be determined
      for purposes of this Plan, it shall be determined as follows: (i) if the
      Common Stock or other security is listed on an established stock exchange
      or any automated quotation system that provides sale quotations, the
      closing sale price for a share thereof on such exchange or quotation
      system on the applicable date or, if shares are not traded on such day, on
      the next preceding trading date, (ii) if the Common Stock or other
      security is not listed on any exchange or quotation system, but bid and
      asked prices are quoted and published, the mean between the quoted bid and
      asked prices on the applicable date or, if bid and asked prices are not
      available on such day, on the next preceding day on which such prices were
      available; and (iii) if the Common Stock or other security is not
      regularly quoted, the fair market value of a share thereof on the
      applicable date as established by the Committee in good faith.
 
            11.12 CHANGE OF CONTROL.
 
                  (a) Unless otherwise provided in the Incentive Agreement, a
            Change of Control shall mean:
 
                        (i) the acquisition by any person of beneficial
                  ownership of 30% or more of the outstanding shares of the
                  Common Stock or 30% or more of the combined voting power of
                  CenturyTel's then outstanding securities entitled to vote
                  generally in the election of directors; provided, however,
                  that for purposes of this subsection (i), the following
                  acquisitions shall not constitute a Change of Control:
 
                              (A) any acquisition (other than a Business
                        Combination (as defined below) which constitutes a
                        Change of Control under Section 11.12(a)(iii) hereof) of
                        Common Stock directly from the Company,
 
                              (B) any acquisition of Common Stock by the
                        Company,
 
                              (C) any acquisition of Common Stock by any
                        employee benefit plan (or related trust) sponsored or
                        maintained by the Company or any corporation controlled
                        by the Company, or
 
                              (D) any acquisition of Common Stock by any
                        corporation pursuant to a Business Combination that does
                        not constitute a Change of Control under Section
                        11.12(a)(iii) hereof; or
 
                        (ii) individuals who, as of January 1, 2005, constituted
                  the Board of Directors of CenturyTel (the "Incumbent Board")
                  cease for any reason to constitute at least a majority of the
                  Board of Directors; provided, however, that any individual
                  becoming a director subsequent to such date whose election, or
                  nomination for election by CenturyTel's shareholders, was
                  approved by a vote of at least two-thirds of the directors
                  then comprising the Incumbent Board shall be considered a
                  member of the Incumbent Board, unless such individual's
                  initial assumption of office occurs as a result of an actual
                  or threatened election contest with respect to the election or
                  removal of directors or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a
                  person other than the Incumbent Board; or
 
                        (iii) consummation of a reorganization, share exchange,
                  merger or consolidation (including any such transaction
                  involving any direct or indirect subsidiary of CenturyTel) or
                  sale or other disposition of all or
 
                  substantially all of the assets of the Company (a "Business
                  Combination"); provided, however, that in no such case shall
                  any such transaction constitute a Change of Control if
                  immediately following such Business Combination:
 
                              (A) the individuals and entities who were the
                        beneficial owners of CenturyTel's outstanding Common
                        Stock and CenturyTel's voting securities entitled to
                        vote generally in the election of directors immediately
                        prior to such Business Combination have direct or
                        indirect beneficial ownership, respectively, of more
                        than 50% of the then outstanding shares of common stock,
                        and more than 50% of the combined voting power of the
                        then outstanding voting securities entitled to vote
                        generally in the election of directors of the surviving
                        or successor corporation, or, if applicable, the
                        ultimate parent company thereof (the "Post-Transaction
                        Corporation"), and
 
                              (B) except to the extent that such ownership
                        existed prior to the Business Combination, no person
                        (excluding the Post-Transaction Corporation and any
                        employee benefit plan or related trust of either
                        CenturyTel, the Post-Transaction Corporation or any
                        subsidiary of either corporation) beneficially owns,
                        directly or indirectly, 20% or more of the then
                        outstanding shares of common stock of the corporation
                        resulting from such Business Combination or 20% or more
                        of the combined voting power of the then outstanding
                        voting securities of such corporation, and
 
                              (C) at least a majority of the members of the
                        board of directors of the Post-Transaction Corporation
                        were members of the Incumbent Board at the time of the
                        execution of the initial agreement, or of the action of
                        the Board of Directors, providing for such Business
                        Combination; or
 
                        (iv) approval by the shareholders of CenturyTel of a
                  complete liquidation or dissolution of CenturyTel.
 
            For purposes of this Section 11.12, the term "person" shall mean a
            natural person or entity, and shall also mean the group or syndicate
            created when two or more persons act as a syndicate or other group
            (including a partnership or limited partnership) for the purpose of
            acquiring, holding, or disposing of a security, except that "person"
            shall not include an underwriter temporarily holding a security
            pursuant to an offering of the security.
 
                  (b) Upon a Change of Control of the type described in clause
            (a)(i) or (a)(ii) of this Section 11.12 or upon the approval by the
            Board of Directors of CenturyTel of any Change of Control of the
            type described in clause (a)(iii) or (a)(iv) of this Section 11.12,
            all outstanding Incentives granted pursuant to this
 
 
            Plan shall automatically become fully vested and exercisable, all
            restrictions or limitations on any Incentives shall automatically
            lapse and, unless otherwise provided in the Incentive Agreement, all
            performance criteria and other conditions relating to the payment of
            Incentives shall be deemed to be achieved at the target level
            without the necessity of action by any person.
 
                  (c) No later than 30 days after a Change of Control of the
            type described in subsections (a)(i) or (a)(ii) of this Section
            11.12 and no later than 30 days after the approval by the Board of a
            Change of Control of the type described in subsections (a)(iii) or
            (a)(iv) of this Section 11.12, the Committee, acting in its sole
            discretion without the consent or approval of any participant (and
            notwithstanding any removal or attempted removal of some or all of
            the members thereof as directors or Committee members), may act to
            effect one or more of the alternatives listed below, which may vary
            among individual participants and which may vary among Incentives
            held by any individual participant; provided, however, that no such
            action may be taken if it would result in the imposition of a
            penalty on the participant under Section 409A of the Code as a
            result thereof:
 
                        (i) require that all outstanding options, SARs or Other
                  Stock-Based Awards be exercised on or before a specified date
                  (before or after such Change of Control) fixed by the
                  Committee, after which specified date all unexercised options,
                  SARs and Other Stock-Based Awards and all rights of
                  participants thereunder shall terminate,
 
                        (ii) make such equitable adjustments to Incentives then
                  outstanding as the Committee deems appropriate to reflect such
                  Change of Control and provide participants with substantially
                  equivalent rights before and after such Change of Control
                  (provided, however, that the Committee may determine in its
                  sole discretion that no adjustment is necessary),
 
                        (iii) provide for mandatory conversion or exchange of
                  some or all of the outstanding options, SARs, restricted stock
                  units or Other Stock-Based Awards held by some or all
                  participants as of a date, before or after such Change of
                  Control, specified by the Committee, in which event such
                  Incentives shall be deemed automatically cancelled and the
                  Company shall pay, or cause to be paid, to each such
                  participant an amount of cash per share equal to the excess,
                  if any, of the Change of Control Value of the shares subject
                  to such option, SAR, restricted stock unit or Other
                  Stock-Based Award, as defined and calculated below, over the
                  per share exercise price or base price of such Incentive or,
                  in lieu of such cash payment, the issuance of Common Stock or
                  securities of an acquiring entity having a Fair Market Value
                  equal to such excess, or
 
                        (iv) provide that thereafter, upon any exercise or
                  payment of an Incentive that entitles the holder to receive
                  Common Stock, the holder shall be entitled to purchase or
                  receive under such Incentive, in lieu of the
 
            number of shares of Common Stock then covered by such Incentive, the
            number and class of shares of stock or other securities or property
            (including cash) to which the holder would have been entitled
            pursuant to the terms of the agreement providing for the
            reorganization, share exchange, merger, consolidation or asset sale,
            if, immediately prior to such Change of Control, the holder had been
            the record owner of the number of shares of Common Stock then
            covered by such Incentive.
 
            (d) For the purposes of conversions or exchanges under paragraph
      (iii) of Section 11.12(c), the "Change of Control Value" shall equal the
      amount determined by whichever of the following items is applicable:
 
                  (i) the per share price to be paid to holders of Common Stock
            in any such merger, consolidation or other reorganization,
 
                  (ii) the price per share offered to holders of Common Stock in
            any tender offer or exchange offer whereby a Change of Control takes
            place, or
 
                  (iii) in all other events, the fair market value of a share of
            Common Stock, as determined by the Committee as of the time
            determined by the Committee to be immediately prior to the effective
            time of the conversion or exchange.
 
            (e) In the event that the consideration offered to shareholders of
      CenturyTel in any transaction described in this Section 11.12 consists of
      anything other than cash, the Committee shall determine the fair cash
      equivalent of the portion of the consideration offered that is other than
      cash.
 
      11.13 REPURCHASE. Upon approval of the Committee, the Company may
repurchase all or a portion of a previously granted Incentive from a participant
by mutual agreement by payment to the participant of cash or Common Stock or a
combination thereof with a value equal to the value of the Incentive determined
in good faith by the Committee; provided, however, that in no event will this
section be construed to grant the Committee the power to take any action in
violation of Section 5.6 or 8.7.
 
      11.14 LIABILITY.
 
            (a) Neither CenturyTel, its affiliates or any of their respective
      directors or officers shall be liable to any participant relating to the
      participant's failure to (i) realize any anticipated benefit under an
      Incentive due to the failure to satisfy any applicable conditions to
      vesting, payment or settlement, including the failure to attain
      performance goals or to satisfy the conditions specified in Section 11.5
      or (ii) realize any anticipated tax benefit or consequence due to changes
      in applicable law, the particular circumstances of the participant, or any
      other reason.
 
            (b) No member of the Committee (or officer of the Company exercising
      delegated authority of the Committee under Section 3 thereof) will be
      liable for any action or determination made in good faith with respect to
      this Plan or any Incentive.
 
      11.15 INTERPRETATION.
 
            (a) Unless the context otherwise requires, (i) all references to
      Sections are to Sections of this Plan, (ii) the term "including" means
      including without limitation, (iii) all references to any particular
      Incentive Agreement shall be deemed to include any amendments thereto or
      restatements thereof, and (iv) all references to any particular statute
      shall be deemed to include any amendment, restatement or re-enactment
      thereof or any statute or regulation substituted therefore.
 
            (b) The titles and subtitles used in this Plan or any Incentive
      Agreement are used for convenience only and are not to be considered in
      construing or interpreting this Plan or the Incentive Agreement.
 
            (c) All pronouns contained in this Plan or any Incentive Agreement,
      and any variations thereof, shall be deemed to refer to the masculine,
      feminine or neutral, singular or plural, as the identities of the parties
      may require.
 
            (d) Whenever any provision of this Plan authorizes the Committee to
      take action or make determinations with respect to outstanding Incentives
      that have been granted or awarded by the chief executive officer of
      CenturyTel under Section 3(i) hereof, each such reference to "Committee"
      shall be deemed to include a reference to any officer of the Company that
      has delegated administrative authority under Section 3(ii) of this Plan
      (subject to the limitations of such section).
 
      11.16 COMPLIANCE WITH SECTION 409A. It is the intent of the Company that
this Plan comply with the requirements of Section 409A of the Code with respect
to any Incentives that constitute non-qualified deferred compensation under
Section 409A and the Company intends to operate the Plan in compliance with
Section 409A and the Department of Treasury's guidance or regulations
promulgated thereunder. If the Committee grants any Incentives or takes any
other action that would, either immediately or upon vesting or payment of the
Incentive, inadvertently result in the imposition of a penalty on a participant
under Section 409A of the Code, then the Company, in its discretion, may, to the
maximum extent permitted by law, unilaterally rescind ab initio, sever, amend or
otherwise modify the grant or action (or any provision of the Incentive) in such
manner necessary for the penalty to be inapplicable or reduced.
 
                               * * * * * * * * * *
 
                                  CERTIFICATION
 
      The undersigned Secretary of CenturyTel, Inc. hereby certifies that the
foregoing CenturyTel, Inc. 2005 Management Incentive Compensation Plan was (i)
recommended to the Board of Directors of CenturyTel, Inc. (the "Board") by its
Compensation Committee at a meeting of the Compensation Committee duly held on
February 17, 2005, (ii) adopted by the Board at a meeting duly held on February
22, 2005, and (iii) approved by the requisite affirmative vote of the
shareholders of CenturyTel, Inc. at its 2005 Annual Meeting of Shareholders held
on May 12, 2005.