Exhibit 10.1

FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE CENTURYTEL, INC.
2005 MANAGEMENT INCENTIVE COMPENSATION PLAN
(2007 Grants to Section 16 Officers)
 
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is entered into as
of February 26, 2007, by and between CenturyTel, Inc., a Louisiana corporation
(“CenturyTel”), and _________________ (“Optionee”).
 
WHEREAS, CenturyTel maintains the 2005 Management Incentive Compensation Plan
(the “Plan”), under which the Compensation Committee of the Board of Directors
of CenturyTel (the “Committee”) may, directly or indirectly, among other things,
grant options to purchase shares of CenturyTel’s common stock, $1.00 par value
per share (the “Common Stock”), to key employees of CenturyTel or its
subsidiaries (collectively, the “Company”), on terms and conditions as it may
deem appropriate; and
 
WHEREAS, pursuant to the Plan the Committee has awarded to the Optionee an
option to purchase shares of Common Stock on the terms and conditions specified
below;
 
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
 
 
1.  
GRANT OF OPTION

1.01     In consideration of future services, CenturyTel hereby grants to
Optionee, effective February 26, 2007 (the “Date of Grant”), the right,
privilege and option to purchase _______ shares of Common Stock (the “Option”)
at an exercise price of $45.90 per share.

1.02     The Option is a non-qualified stock option and shall not be treated as
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).
 
 
2. 
TIME OF EXERCISE
 

        2.01     Subject to the provisions of the Plan and the other provisions
of this Agreement, the Optionee shall be entitled to exercise the Option as
follows:
 

 
With respect to one-third of the shares covered by the
Option...........................................................................
 
on or after February 26, 2008
 
   
With respect to two-thirds of the shares covered by the Option, less any shares
previously issued.............
 
on or after February 26, 2009
 
   
With respect to all of the shares covered by the Option, less any shares
previously issued...................
 
on or after February 26, 2010.
 
 

 
The Option shall expire and may not be exercised later than February 26, 2017,
ten years after the Date of Grant.
 
 
2.02   Notwithstanding the foregoing, the Option shall become accelerated and
immediately exercisable in full (a) if Optionee dies while he is employed by the
Company, (b) if Optionee becomes disabled within the meaning of Section 22(e)(3)
of the Code (“Disability”) while he is employed by the Company, (c) if Optionee
retires from employment with the Company on or after attaining the age of 55
with at least ten years of prior service with the Company (“Retirement”) or (d)
pursuant to the provisions of the Plan.
 
3.
CONDITIONS FOR EXERCISE OF OPTION
 

 
During Optionee’s lifetime, the Option may be exercised only by him or by his
legal representative. The Option must be exercised while Optionee is employed by
the Company, or, to the extent exercisable at the time of termination of
employment, within 190 days of the date on which he ceases to be an employee,
except that (a) if he ceases to be an employee because of Retirement, the Option
may be exercised within three years from the date on which he ceases to be an
employee, (b) if an Optionee’s employment is terminated for cause, the
unexercised portion of the Option is immediately terminated, and (c) in the
event of Optionee’s Disability or death, the Option may be exercised by the
Optionee or, in the case of death, by his estate or by the person to whom such
right devolves from him by reason of his death within two years after the date
of his Disability or death; provided, however, that the Option and all option
gain, as defined in Section 4.01, shall at all times be subject to the
forfeiture provisions of Section 4 hereof; and provided further that no rights
to purchase Common Stock under this Option may be exercised later than ten years
after the Date of Grant.
 
4. 
FORFEITURE OF OPTION AND OPTION GAIN
 

4.01     If, at any time during Optionee’s employment by the Company or within
18 months after termination of employment, Optionee engages in any activity in
competition with any activity of the Company, or inimical, contrary or harmful
to the interests of the Company, including but not limited to: (a) conduct
relating to Optionee’s employment for which either criminal or civil penalties
against Optionee may be sought, (b) conduct or activity that results in
termination of Optionee’s employment for cause, (c) violation of Company
policies, including, without limitation, the Company’s insider trading policy
and corporate compliance program, (d) accepting employment with, acquiring a 5%
or more equity or participation interest in, serving as a consultant, advisor,
director or agent of, directly or indirectly soliciting or recruiting any
employee of the Company who was employed at any time during Optionee’s tenure
with the Company, or otherwise assisting in any other capacity or manner any
company or enterprise that is directly or indirectly in competition with or
acting against the interests of the Company or any of its lines of business (a
“competitor”), except for (A) any isolated, sporadic accommodation or assistance
provided to a competitor, at its request, by Optionee during Optionee’s tenure
with the Company, but only if provided in the good faith and reasonable belief
that such action would benefit the Company by promoting good business relations
with the competitor and would not harm the Company’s interests in any
substantial manner or (B) any other service or assistance that is provided at
the request or with the written permission of the Company, (e) disclosing or
misusing any confidential information or material concerning the Company, (f)
engaging in, promoting, assisting or otherwise participating in a hostile
takeover attempt of the Company or any other transaction or proxy contest that
could reasonably be expected to result in a Change of Control (as defined in the
Plan) not approved by CenturyTel’s Board of Directors or (g) making any
statement or disclosing any information to any customers, suppliers, lessors,
lessees, licensors, licensees, regulators, employees or others with whom the
Company engages in business that is defamatory or derogatory with respect to the
business, operations, technology, management, or other employees of the Company,
or taking any other action that could reasonably be expected to injure the
Company in its business relationships with any of the foregoing parties or
result in any other detrimental effect on the Company, then (i) the Option shall
automatically terminate without any payment to Optionee effective the date on
which Optionee engages in such activity, unless terminated sooner by operation
of another term or condition of this Agreement or the Plan, and (ii) Optionee
shall pay in cash to the Company, without interest, any option gain realized by
Optionee from exercising all or a portion of the Option during the period
beginning one year prior to termination of employment (or one year prior to the
date Optionee first engages in such activity if no termination occurs) and
ending on the date on which the Option terminates. For purposes hereof, “option
gain” shall mean the difference between the closing market price of the Common
Stock on the date of exercise minus the exercise price, multiplied by the number
of shares purchased.

4.02     If Optionee owes any amount to the Company under Section 4.01 above,
Optionee acknowledges that the Company may deduct such amount from any amounts
the Company owes Optionee from time to time for any reason (including without
limitation amounts owed to Optionee as salary, wages, reimbursements or other
compensation, fringe benefits, retirement benefits or vacation pay). Whether or
not the Company elects to make any such set-off in whole or in part, if the
Company does not recover by means of set-off the full amount Optionee owes it,
Optionee hereby agrees to pay immediately the unpaid balance to the Company.
 
4.03     Optionee may be released from Optionee’s obligations under Sections
4.01 and 4.02 above only if the Committee determines in its sole discretion that
such action is in the best interests of the Company.
 
 
5. 
PREFERENCE SHARE PURCHASE RIGHTS
 
 
Upon exercise of an Option at a time when preference share purchase rights to
purchase shares of preference stock or other securities or property of the
Company (“Rights”) remain outstanding pursuant to any rights agreement, then
Optionee shall receive Rights in conjunction with Optionee’s receipt of shares
of Common Stock on the terms and conditions of the applicable rights agreement.
 
 
6. 
ADDITIONAL CONDITIONS
 
 
Anything in this Agreement to the contrary notwithstanding, if at any time
CenturyTel further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document) of the
shares of Common Stock issuable pursuant to the exercise of an Option 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
issuance of shares of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such shares of Common Stock shall not be
issued, 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 CenturyTel. CenturyTel agrees to use commercially reasonable
efforts to issue all shares of Common Stock issuable hereunder on the terms
provided herein.
 
 
7.
ATTORNEYS’ FEES AND EXPENSES
 
 
Should any party hereto retain counsel for the purpose of enforcing, or
preventing the breach of, any provision hereof, including, but not limited to,
the institution of any action or proceeding in court to enforce any provision
hereof, to enjoin a breach of any provision of this Agreement, to obtain
specific performance of any provision of this Agreement, to obtain monetary or
liquidated damages for failure to perform any provision of this Agreement, or
for a declaration of such parties’ rights or obligations hereunder, or for any
other judicial remedy, then the prevailing party shall be entitled to be
reimbursed by the losing party for all costs and expenses incurred thereby,
including, but not limited to, attorneys’ fees (including costs of appeal).
 
 
8.
NO CONTRACT OF EMPLOYMENT INTENDED

 
Nothing in this Agreement shall confer upon Optionee any right to continue in
the employment of the Company or to interfere in any way with the right of the
Company to terminate Optionee’s employment relationship with the Company at any
time.
 
9.
WITHHOLDING TAXES
 
 
The Company may make such provisions as it may deem appropriate for the
withholding of any federal, state and local taxes that it determines are
required to be withheld on any exercise of the Option. In accordance with and
subject to the terms of the Plan, Optionee may satisfy the tax withholding
obligation in whole or in part by delivering currently owned shares of Common
Stock or electing to have CenturyTel withhold from the shares Optionee otherwise
would receive hereunder shares of Common Stock having a value equal to the
minimum amount required to be withheld (as determined under the Plan); provided,
however, that to prevent the issuance of fractional shares and the
under-withholding of taxes, Optionee agrees that the number of shares withheld
or delivered shall be rounded up to the next whole number of shares.
 
 
10.
BINDING EFFECT
 
Upon being duly executed and delivered by CenturyTel and Optionee, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, legal representatives and
successors. Without limiting the generality of the foregoing, whenever the term
“Optionee” is used in any provision of this Agreement under circumstances where
the provision appropriately applies to the heirs, executors, administrators or
legal representatives to whom this Option may be transferred by will or by the
laws of descent and distribution, the term “Optionee” shall be deemed to include
such person or persons.
 
 
11. 
INCONSISTENT PROVISIONS
 
Optionee agrees that the Option granted hereby is subject to the terms,
conditions, restrictions and other provisions of the Plan as fully as if all
such provisions were set forth in their entirety in this Agreement. If any
provision of this Agreement conflicts with a provision of the Plan, the Plan
provision shall control. Optionee acknowledges that a copy of the Plan and a
prospectus summarizing the Plan was distributed or made available to Optionee
and that Optionee was advised to review such materials prior to entering into
this Agreement. Optionee waives the right to claim that the provisions of the
Plan are not binding upon Optionee and Optionee’s heirs, executors,
administrators, legal representatives and successors.
 
12.
ADJUSTMENTS TO OPTIONS
 
The parties acknowledge that (i) appropriate adjustments shall be made to the
number and class of shares of Common Stock subject to the Option and to the
exercise price in certain situations described in Section 4.5 of the Plan and
(ii) adjustments to the rights of the Optionee might be made in the event of a
Change of Control, as defined in Section 11.12 of the Plan.
 
 
13.
TERMINATION OF OPTION
 
The Committee, in its sole discretion, may terminate the Option. However, no
termination may adversely affect the rights of Optionee to the extent that the
Option is currently exercisable on the date of such termination.
 
 
14.
GOVERNING LAW
 
This Agreement shall be governed by and construed in accordance with the laws of
the State of Louisiana.
 
 
15.
SEVERABILITY
 
If any term or provision of this Agreement, or the application thereof to any
person or circumstance, shall at any time or to any extent be invalid, illegal
or unenforceable in any respect as written, Optionee and CenturyTel intend for
any court construing this Agreement to modify or limit such provision so as to
render it valid and enforceable to the fullest extent allowed by law. Any such
provision that is not susceptible of such reformation shall be ignored so as to
not affect any other term or provision hereof, and the remainder of this
Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid, illegal or
unenforceable, shall not be affected thereby and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
 
 
16.
ENTIRE AGREEMENT; MODIFICATION
 
The Plan and this Agreement contain the entire agreement between the parties
with respect to the subject matter contained herein and may not be modified,
except as provided in the Plan, as it may be amended from time to time in the
manner provided therein, or in this Agreement, as it may be amended from time to
time by a written document signed by each of the parties hereto. Any oral or
written agreements, representations, warranties, written inducements, or other
communications with respect to the subject matter contained herein made prior to
the execution of the Agreement shall be void and ineffective for all purposes.
 

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

 
CenturyTel, Inc.
             
By: ____________________________________
 
Glen F. Post, III
 
Chairman and Chief Executive Officer
             
_______________________________________
 
{insert name}
 
Optionee