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                                 EXHIBIT 99.(ii)


                          AMERICAN CLASSIC VOYAGES CO.
             Amended and Restated 1995 Employee Stock Purchase Plan


                              FINANCIAL STATEMENTS

                 As of and for the year Ended December 31, 1998



CONTENTS                                                                  PAGE

Independent Auditors' Report...........................................     1

Statement of Financial Condition.......................................     2

Statement of Changes in Plan Equity....................................     3

Notes to Financial Statements..........................................     4

Signatures.............................................................     6

Consent of KPMG LLP....................................................     7














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                          Independent Auditors' Report



Compensation Committee of the Board of Directors
American Classic Voyages Co.

We have audited the accompanying statement of financial condition of the
American Classic Voyages Co. Amended and Restated 1995 Employee Stock Purchase
Plan (the "Plan") as of December 31, 1998, and the related statement of changes
in plan equity for the year ended December 31, 1998. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan at December 31, 1998
and the Plan's changes in plan equity for the year ended December 31, 1998, in
conformity with generally accepted accounting principles.


                                                          KPMG LLP



Chicago, Illinois
February 26, 1999








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                          AMERICAN CLASSIC VOYAGES CO.
             Amended and Restated 1995 Employee Stock Purchase Plan
                        Statement of Financial Condition
                                December 31, 1998

<TABLE>
<CAPTION>


Assets:
<S>                                                                             <C>       
         Cash...............................................................    $     953

         American Classic Voyages Co. stock options, at fair market
               value (3,664 options, total cost of $46,716).................       54,960
                                                                                ---------
         Total assets.......................................................       55,913
                                                                                =========

 Plan equity................................................................    $  55,913
                                                                                =========
                                                                                


</TABLE>

                          The accompanying notes are an
                  integral part of these financial statements.













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                          AMERICAN CLASSIC VOYAGES CO.
             Amended and Restated 1995 Employee Stock Purchase Plan
                       Statement of Changes in Plan Equity
                       For the Year Ended December 31,1998

<TABLE>
<CAPTION>



<S>                                                                             <C>               
Plan equity at the beginning of the year.................................       $           41,922

Additions

     Participant contributions...........................................                  155,446
     Unrealized discount.................................................                   27,373
                                                                                -----------------------

                      Total additions....................................                  182,819

Deductions                                                                       

     Purchase and distribution of common stock
         to participants.................................................                  168,612
     Cash distributed to terminated participants.........................                      216
                                                                                -----------------------

                    Total deductions.....................................                  168,828

Plan equity at the end of the year.......................................       $           55,913
                                                                                -----------------------

</TABLE>



                          The accompanying notes are an
                  integral part of these financial statements.










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                          AMERICAN CLASSIC VOYAGES CO.
             Amended and Restated 1995 Employee Stock Purchase Plan
                          Notes to Financial Statements


(1)      Summary of Significant Accounting Policies

The financial statements of the American Classic Voyages Co. Amended and
Restated 1995 Employee Stock Purchase Plan (the "Plan") have been prepared under
the accrual basis of accounting.

All administrative expenses of the Plan are paid by American Classic Voyages Co.
(the "Company").

(2)      Description of Plan

The Plan was adopted by the Company's Board of Directors during March 1995 and
became effective on June 15, 1995. The Plan was amended and restated on July 1,
1998. The Plan is a voluntary contribution plan that meets the requirements of
Section 423(b) of the Internal Revenue Code ("IRC") and is designed to enable
eligible employees (the participants) of the Company to purchase common stock in
the Company at a discount by exercising options to purchase common stock
(options). The Plan is administered by the Company which has delegated certain
administrative responsibilities to the Compensation Committee of the Board of
Directors of the Company. The Plan provides for a series of quarterly purchase
periods (offering period). An offering period is a period of three months
beginning each January 1, April 1, July 1 and October 1 and ending on the last
day of each quarter, respectively.

The Company has reserved 500,000 shares of common stock for participants under
the Plan. For the year ended December 31, 1998, 11,622 shares of common stock
were issued. At December 31, 1998, 460,542 shares remain issuable under the
Plan.

         Eligibility

Full time employees who have completed 90 days of service with the Company are
eligible to participate in the Plan's next offering period by contributing
payroll withholdings during each offering period. Participants elect to
participate in the Plan by completing and submitting an election form to the
Plan administrator.

         Grant of Options

Under the Plan, the Company grants options to all eligible employees at the
beginning of each offering period. The number of shares subject to option for
each participant is the quotient of the aggregate payroll deductions authorized
by the participant for the option period plus any remaining cash balance from
the prior offering period in the participant's account divided by the applicable
option price per share; provided, however, that the maximum number of shares for
which options may be granted to a participant for any option period shall not
exceed $25,000 of fair market value (as provided by Section 423(b) of the IRC).
For purposes of the Plan, "fair market value" of the common stock on each of the
date of grant, the date of exercise or other applicable date is determined on
the basis of the per share closing price of the last sale of the common stock on
the applicable date as reported by The Nasdaq Stock Market.






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         Exercise of Options

Each participant is considered to have exercised his or her option on the last
business day of each offering period to the extent of the maximum number of
whole shares of the Company's common stock that may be purchased with the
balance on that date in the participant's account under the Plan for such
option. Unless a participant elects otherwise, the Company carries the remaining
balance of his or her account to the next offering period; provided that only
amounts less than the price of a single share in an offering period are carried
over from the offering period to the next offering period. The option price per
share is equal to 85 percent of the lesser of (i) the closing price of such
shares on the last business day of each offering period, or (ii) the greater of
(a) the average closing price for the offering period and (b) the closing price
on the first business day of each offering period.

         Contributions to the Plan

Eligible employees may contribute annually to the Plan up to the smaller of (1)
20% of their annual compensation (not including commissions, bonuses, overtime,
other or special payments, fees or allowances) or (2) an amount which complies
with the $25,000 limitation discussed previously.

         Participant Accounts

All payroll deductions during the offering period are held in the general assets
of the Company and credited to a special account established under the Plan in
the employee's name. No interest is paid or credited to amounts accumulated in
the special account under the Plan. On the last business day of an offering
period, the Company issues whole shares of common stock in return for the funds
accumulated in the special account under the Plan.

         Unrealized Discount

Unrealized discount represents the discount or aggregate difference between the
market value price of the Company's common stock and the established discount
purchase price for the offering period.

 
         Withdrawals

An employee can withdraw from the Plan at any time with proper notice. Employees
are entitled to a full refund of monies previously withheld under the Plan
during the current Plan offering period upon withdrawal. Withdrawal from the
Plan is also effected by termination of service with the Company, other than
because of death, disability or retirement, at which time the cash balance in
the participant's account is returned to him or her.

        Distributions

The Company's transfer agent issues shares of stock in the form of a book entry
to each participant's account upon receipt of authorization from the Company.
The transfer agent issues stock certificates, which are registered in the
participant's name, to the participant upon their written request or upon
termination of employment with the Company. All shares purchased under the
provisions of the Plan are deemed to be immediately distributed to the
participants as of the last business day of each offering period.

(3)      Internal Revenue Service Status

The Plan meets the requirements of Section 423(b) of the IRC. 
                                       

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                          AMERICAN CLASSIC VOYAGES CO.
             Amended and Restated 1995 Employee Stock Purchase Plan

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administration Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.




                        AMERICAN CLASSIC VOYAGES CO.
                        Amended and Restated 1995 Employee Stock Purchase Plan








Dated:  March 31, 1999        By:    /s/Mark Slezak
                                     -------------------------------------------
                                     Member of the Compensation Committee of the
                                     Board of Directors of American Classic
                                     Voyages Co.













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                               Consent of KPMG LLP



Compensation Committee of the Board of Directors
American Classic Voyages Co.

We consent to incorporation by reference in the previously filed registration
statement (No. 33-92382) on Form S-8 of American Classic Voyages Co. of our
report dated February 26, 1999, relating to the statement of financial condition
of the American Classic Voyages Co. Amended and Restated 1995 Employee Stock
Purchase Plan as of December 31, 1998 and the related statement of changes in
plan equity for the year ended December 31, 1998 which report appears in Exhibit
99.(ii) of the December 31, 1998 Annual Report on Form 10-K of American Classic
Voyages Co.


                                                                 /s/ KPMG LLP

                                                                     KPMG LLP



Chicago, Illinois
March 31, 1999





















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