EXHIBIT 10.10

                               THIRD AMENDMENT TO
                          THE GREAT TRAIN STORE COMPANY
                        1994 INCENTIVE COMPENSATION PLAN



     WHEREAS,  The Great Train Store  Company  (the  "Company")  has  heretofore
adopted, and subsequently  amended, The Great Train Store Company 1994 Incentive
Compensation Plan (the "Plan"),  under which Plan an aggregate of 460,000 shares
of the Company's common stock, $.01 par value per share (the "Common Stock") may
be awarded subject to forfeiture or may be issued upon the exercise of incentive
and  nonqualified  stock options granted  pursuant to and in accordance with the
terms of the Plan;

     WHEREAS,  in order to  provide  additional  incentive  to  certain  persons
engaged by the Company to promote the  long-term  interests of the Company,  the
Board of Directors of the Company has  authorized  the  amendment of the Plan to
extend the  description  of those persons  eligible to receive  awards under the
Plan to include  consultants,  advisors  and other  persons  who render  similar
services to the Company on a regular basis;

     NOW, THEREFORE, the Plan be and hereby is amended as follows:

     A.  Article  I of the  Plan is  hereby  deleted  in its  entirety,  and the
following  substituted  in lieu  thereof to  constitute  said Article I from and
after the effectiveness of this Amendment:

                             I. Purpose of the Plan

     The Great Train Store Company 1994 Incentive Compensation Plan (the "Plan")
is  intended to provide a means  whereby  certain  key  employees,  consultants,
advisors and other persons who render similar  services to The Great Train Store
Company, a Delaware  corporation (the "Company") on a regular basis, may develop
a sense of  proprietorship  and  personal  involvement  in the  development  and
financial success of the Company and its subsidiaries,  and to encourage them to
remain with and devote their best efforts to the business of the Company and its
subsidiaries,   thereby   advancing   the  interests  of  the  Company  and  its
stockholders. Accordingly, the Company may grant to eligible participants awards
("Awards")  in the form of stock options  ("Options")  with respect to shares of
the Company's  common stock,  par value $0.01 per share (the "Stock") and in the
form of shares of Stock which are subject to certain  restrictions  and possible
forfeiture  ("Restricted  Stock").  Options  may  either be  nonqualified  stock
options  ("Nonqualified  Options") or options  ("Incentive Stock Options") which
are  intended to qualify as incentive  stock  options  under  Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").





Notwithstanding  the foregoing,  participants  who are not also key employees of
the Company  shall not be entitled  to receive  awards in the form of  Incentive
Stock Options or Restricted Stock.

     B. The reference in the first sentence of the first paragraph of Article II
of the Plan to  "disinterested  persons" is hereby deleted in its entirety,  and
the term "non-employee director" as defined in paragraph (b)(3)(i) of Rule 16b-3
is  substituted  in lieu  thereof  from  and  after  the  effectiveness  of this
Amendment.

     C. The fourth  paragraph of Article II of the Plan is hereby deleted in its
entirety,  and the  following  substituted  in lieu thereof to  constitute  said
paragraph from and after the effectiveness of this Amendment:

     Only key  employees,  consultants,  advisors  and other  persons who render
similar  services  to the  Company  and its  subsidiaries  shall be  eligible to
receive  Awards  under the  Plan.  In  granting  Awards  to a  participant,  the
Committee shall take into  consideration  the  contribution  the participant has
made or may make to the  success  of the  Company or its  subsidiaries  and such
other considerations as the Committee shall determine.  The Committee shall also
have the authority to consult with and receive recommendations from officers and
other  employees  of the  Company  and its  subsidiaries  with  regard  to these
matters. In no event shall any participant or his or her legal  representatives,
heirs,  legatees,  distributees,  or successors have any right to participate in
the Plan, except to such extent, if any, as the Committee shall determine.

     D. Paragraph G. of Article IV of the Plan is hereby modified to include the
following phrase immediately before the first sentence of said paragraph:

         "If the participant is an employee of the Company and...."

     E. All references to "employee" in Articles VII, XI and XIII,  shall be and
hereby are deleted and the term "participant" substituted in lieu thereof.

     IN WITNESS  WHEREOF,  this  Amendment  is dated as of the 16th day of July,
1996.




                                      By:/s/ James H. Levi
                                         James H. Levi
                                         Chairman of the Board, President
                                         and Chief Executive Officer