Exhibit 10.5

                                 THIRD AMENDMENT
                                       TO
                 COMDIAL CORPORATION 1992 NON-EMPLOYEE DIRECTORS
                              STOCK INCENTIVE PLAN

         THIS THIRD  AMENDMENT  to the  Comdial  Corporation  1992  Non-Employee
Directors  Stock  Incentive  Plan (the "Plan") is made pursuant to the authority
under Section 1 of the Plan for the Board of Directors to amend the Plan.

         Following  Section 14 of the Plan, the following three new sections are
added to read as follows:

"15.     Deferrals of Stock.

         (1) A Participant  may elect to defer the payment of some or all of the
shares of Company Stock otherwise  payable under Section 7(a)(iii) by completing
a deferral  election (a "Stock Deferral  Election").  A Stock Deferral  Election
shall  pertain to a Company  fiscal year with  respect to which a payment may be
due under Section  7(a)(iii).  A Stock Deferral  Election must be in writing and
shall be delivered to the Corporate  Secretary of the Company prior to the start
of the fiscal year to which the Stock Deferral Election pertains,  except for an
election  with  respect to the  Company's  fiscal year ending  December 31, 1997
which shall be delivered within 30 days after the adoption of this Section 15 by
the Board of  Directors.  A stock  Deferral  Election  shall be  irrevocable  in
respect to the fiscal year to which it pertains.  A Stock Deferral Election must
specify the  applicable  amount or percentage of the shares of Common Stock that
the  Participant  wishes to defer. A Stock  Deferral  Election may be made for a
single  fiscal year or may be made  applicable  to all future fiscal years until
revoked. Any revocation shall be effective with respect to the first fiscal year
which begins after the revocation is made.

         (2) With  respect  to each  share of  Company  Stock  for which a Stock
Deferral  Election  is  made,  the  Company  shall  credit  a Stock  Unit to the
Participant's  Stock Unit Account. A Stock Unit shall be credited when the share
of Company Stock otherwise would have been distributed to the Participant.

         (3) The Stock Units credited to each  Participant's  Stock Unit Account
shall be credited with  hypothetical  cash dividends equal to the cash dividends
that are  declared  and paid with respect to Company  Stock.  The Company  shall
determine  as of each record date the amount of cash  dividends  to be paid with
respect to a share of Company  Stock,  and on the payment date of such  dividend
shall credit an equal amount of  hypothetical  cash dividends to each Stock Unit
credited to an Participant's  Stock Unit Account.  The total  hypothetical  cash
dividends  credited to all Stock Units shall then be converted  into Stock Units
by dividing such  hypothetical  cash dividends by the closing trading price of a
share of Company  Stock,  as reported  in The Wall  Street  Journal for the last
trading day before the day the Company  pays  dividends  with respect to Company
Stock.

         (4) The Stock Units credited to each  Participant's  Stock Unit Account
shall be credited to account for any distribution  with respect to Company Stock
other than cash dividends or stock dividends.  The Company shall determine as of
each record  date the amount of the  distribution  to be paid with  respect to a
share of Company  Stock,  and on the  payment  date of such  distribution  shall
credit an equal amount of hypothetical  distribution to each Stock Unit credited
to a  Participant's  Stock Unit  Account.  The total  hypothetical  distribution
credited to all Stock Units shall then be  converted  into a  hypothetical  cash
amount  based on the market  value of such  distribution  as  determined  by the
Board. The hypothetical  cash amount shall then be converted into Stock Units by
dividing such  hypothetical  cash amount by the closing trading price of a share
of Company  Stock,  as reported in The Wall Street  Journal for the last trading
day before the day the Company  makes the  distribution  with respect to Company
Stock.

         (5) The following definitions shall apply to the Plan.

                  (1)      Stock Unit. A  hypothetical  share of Company  Stock.
                           Each Stock Unit  credited  to a  Participant's  Stock
                           Unit Account  shall be deemed to have the same value,
                           from  time to  time,  as a share  of  Company  Stock.
                           Notwithstanding the foregoing,  Stock Units shall not
                           confer upon Participants any of the rights associated
                           with Company Stock,  including,  without  limitation,
                           the right to vote or to receive distributions.  Stock
                           Units  may  not  be  sold,   assigned,   transferred,
                           disposed  of,  pledged,   hypothecated  or  otherwise
                           encumbered.

                  (2)      Stock Unit Account.  The book account established and
                           maintained  for each  Participant to record the Stock
                           Units  awarded to a  Participant  under Section 15 of
                           the Plan.

         (6) A Stock Deferral Election shall provide for payment of a Stock Unit
Account at a future date or dates elected by the  Participant.  If a Participant
is entitled to receive  payment of the  Participant's  Stock Unit  Account,  the
Company  shall  distributed  to the  Participant  that number of whole shares of
Company Stock equal to the number of Stock Units to be distributed. In addition,
the Participant may elect to receive the Stock Unit Account in a single lump sum
payment  upon the  occurrence  of a Change of  Control in lieu of any other form
that would otherwise be payable  pursuant to a prior  election.  The single lump
sum  payment  shall be paid in shares of  Company  Stock as soon as  practicable
after the Change of Control  occurs.  Except for an election made within 30 days
of the  Participant's  first Stock Deferral  Election which shall be immediately
effective,  any election or revocation of an election by the  Participant  as to
the date of payment shall be effective three months after it is made.

         (7) To the extent of  undistributed  amounts in a  Participant's  Stock
Unit Account at the  Participant's  death, the  Participant's  beneficiary shall
continue to receive  payments in the form elected by the  Participant  absent an
election by the  beneficiary.  A beneficiary may elect to receive the balance of
any unpaid  benefit in a single lump sum payment upon the occurrence of a Change
of Control in lieu of the benefit that would  otherwise  be payable.  The single
lump sum payment shall be paid in shares of Company Stock as soon as practicable
after the Change of Control  occurs.  Except for an election made within 30 days
of becoming a beneficiary which shall be immediately effective,  any election or
revocation  of an election by the  beneficiary  shall be efective  three  months
after it is made.


2.       Deferrals of Fees.

         (1) A Participant  may elect to defer the payment of some or all of the
Cash  amounts  payable to a  Participant  for  services  rendered as a director,
including  retainer fees, meeting fees, and committee fees, but excluding travel
and other out of pocket expense reimbursements ("Fees") by completing a deferral
election (a "Fee Deferral  Election").  A Fee Deferral Election shall pertain to
the  period  beginning  on the date of an Annual  Meeting  and ending on the day
before the next Annual  Meeting  Company (the "Deferral  Year").  A Fee Deferral
Election must be in writing and shall be delivered to the Corporate Secretary of
the Company prior to the start of the Deferral Year to which it pertains, except
for an election with respect to the Deferral Year beginning April 29, 1997 which
shall be  delivered  within 30 days after the adoption of this Section 16 by the
Board of Directors.  A Fee Deferral  Election shall be irrevocable in respect to
the Deferral Year to which it pertains. A Fee Deferral Election must specify the
applicable amount or percentage of Fees that the Participant  wishes to defer. A
Fee  Deferral  Election  may be made for a single  Deferral  Year or may be made
applicable to all future Deferral Years until revoked.  Any revocation  shall be
effective as of the last day of the  Deferral  Year in which the  revocation  is
made.

         (2) With  respect to all amounts for which a Fee  Deferral  Election is
made, the Company shall credit an equal deemed amount to the  Participant's  Fee
Deferral  Account.  An amount shall be credited to the Fee Deferral Account when
the Fees otherwise would have been payable to the Participant. Earnings shall be
credited to the Fee Deferral Account  established for the Participant  until the
entire account balance has been paid to the  Participant.  As of the last day of
each calendar quarter,  the Company shall credit each Participant's Fee Deferral
Account with interest on the balance in the Fee Deferral Account. Interest shall
be credited at the rate  established by the Company as its cost of capital under
uniform procedures consistently applied. The Company shall establish its cost of
capital as of January 1 of a calendar  year and shall apply that  interest  rate
for the remainder of the calendar year.

         (a) For purposes of the Plan, Fee Deferral  Account means a bookkeeping
record established for each Participant who makes a Fee Deferral. A Fee Deferral
Account  shall be  established  only for  purposes of  measuring  the  Company's
obligation to the Participant and not to segregate  assets or to identify assets
that may be used to satisfy the obligation.


         (3)  A  Fee  Deferral   Election  shall  provide  for  payment  of  the
Participant's  Fee  Deferral  Account at a future  date or dates  elected by the
Participant.  In addition,  the  Participant may elect to receive payment of the
Participant's  Fee  Deferral  Account  in a  single  lump sum  payment  upon the
occurrence of a Change of Control in lieu of any other form that would otherwise
be payable  pursuant to a prior  election.  The single lump sum payment shall be
paid in cash as soon as practicable  after the Change of Control occurs.  Except
for an election  made  within 30 days of the  Participant's  first Fee  Deferral
Election which shall be immediately effective,  any election or revocation of an
election by the  Participant as to the date of payment shall be effective  three
months after it is made.

         (4) To the extent of  undistributed  amounts in a  Participant's  Stock
Unit Account at the  Participant's  death, the  Participant's  beneficiary shall
continue to receive  payments in the form elected by the  Participant  absent an
election by the  beneficiary.  A beneficiary may elect to receive the balance of
any unpaid  benefit in a single lump sum payment upon the occurrence of a Change
of Control in lieu of the benefit that would  otherwise  be payable.  The single
lump sum payment shall be paid in cash as soon as  practicable  after the Change
of Control  occurs.  Except for an  election  made  within 30 days of becoming a
beneficiary which shall be immediately effective,  any election or revocation of
an election by the beneficiary shall be effective three months after it is made.


3.       Change of Control.

         (a)      For purposes of this Plan, "Change in Control" shall mean:

                  (i) The  Acquisition  of common  stock of the  Company  by any
Unrelated Person which results in such Unrelated Person's  Beneficial  Ownership
being 40% or more of the then outstanding  shares of common stock of the Company
or the combined voting power of the then  outstanding  voting  securities of the
Company entitled to vote generally in the election of directors.

                  (ii) As a result  of, or in  connection  with,  any  tender or
exchange offer, merger or other business combination, sale of stock or assets or
contested  election,  or any  combination  of the  foregoing  transactions,  the
persons who are directors of the Company before such transaction  shall cease to
constitute a majority of the Board of Directors of the Company or any  successor
to the Company,

                  (iii)  Approval  by  the  shareholders  of  the  Company  of a
reorganization,  merger or  consolidation  with respect to which the persons who
were  shareholders  of the Company  immediately  before the  transaction do not,
immediately  after the  transaction,  beneficially  own more than 50% of the ten
outstanding  shares of common stock of the Company or the combined  voting power
of the then  outstanding  voting  securities  of the  Company  entitled  to vote
generally in the election of directors, or

                  ((iv) A sale or other  disposition of all or substantially all
the assets of the Company, other than in the ordinary course of business.

         (b) For purposes of this Plan,  "Beneficial  Ownership"  shall have the
meaning  given  that  term for  purposes  of Rule  13d-3  promulgated  under the
Securities Exchange Act of 1934.

         (c) For purposes of this Plan, "Unrelated Person" shall mean any person
other than:

                  (i)      the Company,

                  (ii)     an employee benefit plan or trust of the Company, or

                  (iii) a person that acquires stock of the Company  pursuant to
an  agreement  with the Company  that is approved by the Board of  Directors  in
advance  of the  acquisition,  unless  the  acquisition  results  in a Change of
Control  pursuant  to section  17(a)(ii),  (iii) or (iv)  above.  A person is an
individual,  entity or group (as defined for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934)."

         IN WITNESS  WHEREOF,  the Company has caused this Third Amendment to be
the Plan to be executed as of November 6, 1997.


                                            COMDIAL CORPORATION


                                            By:      /s/ Wayne R. Wilver
                                                     Wayne R. Wilver
                                                     Senior Vice President