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                                                                    EXHIBIT 10.4

                                AMENDMENT TO THE
                              SERVICE EXPERTS, INC.
                            1996 INCENTIVE STOCK PLAN

         THIS AMENDMENT to the Service Experts, Inc. 1996 Incentive Stock Plan
(the "Plan") is made by Service Experts, Inc. (the "Company"), to be effective
on October 23, 1998.

                                    RECITALS:

         WHEREAS, the Plan was established by the Company by action of its board
of directors on August 16, 1996;

         WHEREAS, the Plan was been amended effective April 3, 1997, to modify
certain administrative provisions; and

         WHEREAS, the Company desires to further amend the Plan to modify the
effect of a change in control on the awards that are granted under the Plan.

         NOW, THEREFORE, the Plan is hereby amended as follows, effective
October 23, 1998:

1. Section 6(g) of the Plan is restated as follows:

                  (g) Effect of Certain Transactions. The provisions of this
         Section 6(g) shall apply to the extent that an Agreement does not
         otherwise expressly address the matters contained herein.

                           (i) If the Company experiences an event which results
                  in a "Change in Control," as defined in Section 6(g)(ii),
                  then, whether or not the vesting requirements set forth in any
                  Agreement have been satisfied, (A) all shares of Restricted
                  Stock that are outstanding at the time of the Change in
                  Control shall become fully vested immediately prior to the
                  Change in Control event, and (B) all Options that are
                  outstanding at the time of the Change in Control shall become
                  fully vested and exercisable immediately prior to the Change
                  in Control event.

                           (ii) A Change in Control will be deemed to have
                  occurred for purposes hereof, upon a merger, consolidation,
                  acquisition of property or stock, separation, reorganization
                  or liquidation of the Company, as a result of which the
                  stockholders of the Company receive cash, stock or other
                  property in exchange for their shares of Stock (but not a
                  public offering of Stock by the Company), and the Company is
                  not the surviving entity.

                           (iii) Upon a Change in Control, all Options that are
                  held by the Participant immediately after the Change in
                  Control shall be assumed by the entity which is the survivor
                  of the transaction, or converted into options to purchase the
                  common stock of the surviving entity, in a transaction to
                  which section 424(a) of the Code applies.






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                           (iv) Notwithstanding the foregoing, a portion of the
                  acceleration of vesting described in this Section shall not
                  occur with respect to an Award to the extent such acceleration
                  of vesting would cause the Participant or holder of such Award
                  to realize less income, net of taxes, after deducting the
                  amount of excise taxes that would be imposed pursuant to
                  section 4999 of the Code, than if accelerated vesting of that
                  portion of the Award did not occur. This paragraph shall not
                  apply to the extent that the Participant is subject to and is
                  indemnified for such tax liability by the Company or
                  otherwise.

2. Section 9(e) of the Plan is restated as follows:

                  (e) In the event of any Change in Control (defined in Section
         6(g)(ii)) in which shares of Stock are purchased for cash in a tender
         offer or are to be converted into cash in a merger, then, unless the
         Committee otherwise determines, each Option (other than an Option
         granted within the last six months held by a person subject to Section
         16(b) of the Exchange Act) shall be converted into a fully exercisable
         right to receive an amount in cash per share subject to such Option
         equal to (A) in the case of a tender offer or merger, the excess, if
         any, of the price paid in such tender offer or merger over the exercise
         price of such Option and (B) in the case of conversion, the excess, if
         any, of the highest market price of the Stock on the date of conversion
         over the exercise price of such Option; provided, however, that any
         acceleration of the right to exercise an Option that occurs under this
         Section 9(e) shall be limited in the manner described in Section
         6(g)(iv).

         IN WITNESS WHEREOF, the Company, acting by and through the undersigned
authorized officer, has executed this instrument this the 23rd day of October,
1998, but to be effective on the date first written above.

                                         SERVICE EXPERTS, INC.

                                    By:  /s/ Anthony M. Schofield  
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                                    Its: Chief Financial Officer, Secretary and
                                         Treasurer

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