<PAGE>
Registration No. 2-63023
811-2884
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
---- -----
Post-Effective Amendment No. 19 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 X
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Amendment No. 19 X
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SALOMON BROTHERS OPPORTUNITY FUND INC
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(Exact name of Registrant as Specified in Charter)
7 World Trade Center, New York, New York 10048
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 783-6301
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Tana Tselepis
Corporate Secretary
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York, 10048
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(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment
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becomes effective.
------------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to Rule 485(b)
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X on January 2, 1996 pursuant to Rule 485(b)
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60 days after filing pursuant to Rule 485(a)
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on pursuant to Rule 485(a)
- ----- -------------------
- ----------------------------------------------------
The Registrant has previously filed a declaration of indefinite registration of
its shares pursuant to Rule 24f-2 under the Investment Company Act of 1940.
Registrant's Rule 24f-2 Notice for the fiscal year ended August 31, 1995 was
filed on October 11, 1995 and a confirming copy of the 24f-2 Notice was filed
via EDGAR on November 29, 1995.
<PAGE>
Salomon Brothers Opportunity Fund
---------------------------------
CALCULATION OF REGISTRATION FEE UNDER
THE SECURITIES ACT OF 1933(1)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Title of Amount Proposed Proposed Amount of
Securities Being Maximum Maximum Registration
Being Registered Offering Aggregate Fee
Registered Price Per Offering
Unit (2) Price (3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Stock
(par value 313,198 $37.86 $290,000 $100
$.01 per share shares
- --------------------------------------------------------------------------------
</TABLE>
(1) The shares being registered as set forth in this table are in addition to
the indefinite number of shares of Capital Stock of Salomon Brothers
Opportunity Fund (the "Fund"), which Registrant has registered under the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to Rule 24f-2
under the Investment Company Act of 1940, as amended (the "1940 Act"). The
Registrant's Rule 24f-2 Notice for its fiscal year ended August 31, 1995 was
filed on October 11, 1995.
(2) Based on the Fund's net asset value of $37.86 December 18, 1995 pursuant to
Rule 457(d) under the 1933 Act and rule 24e-2(a) under the 1940 Act.
(3) In response to Rule 24e-2(b) under the 1940 Act: (1) the calculation of the
maximum aggregate offering price is made pursuant to Rule 24e-2; (2) 975,251
shares of Capital Stock were redeemed by the Fund during the fiscal year
ended August 31, 1995; (3) 669,713 shares are being used for reductions
pursuant to Rule 24f-2 during the current fiscal year; and (4) 305,538
shares are being used for reduction in this amendment pursuant to Rule 24e-
2(a).
<PAGE>
SALOMON BROTHERS OPPORTUNITY FUND INC
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
Part A Prospectus Caption
- -----------------------------------------------------------------------------
Item 1. Cover Page . . . . . . . . . . . . Cover Page
Item 2. Synopsis . . . . . . . . . . . . . Summary, The Fund's
Expenses
Item 3. Condensed Financial
Information . . . . . . . . . . . Financial Highlights;
The Fund's Performance
Item 4. General Description
Registrant . . . . . . . . . . . . Summary; Investment
Objectives; Investment Policies;
Limiting Investment Risks
Item 5. Management of the Fund . . . . . . Financial Highlights;
Management; Purchase
of Shares
Item 6. Capital Stock and Other
Securities . . . . . . . . . . . . Dividends, Distributions and Income
Taxes; Account Services; Capital
Stock
Item 7. Purchase of Securities
Being Offered . . . . . . . . . . Determination of Net Asset Value;
Purchase of Shares; Shareholder
Services
Item 8. Redemption or Repurchase . . . . . Redemption of Shares;
Determination of Net Asset Value
Item 9. Pending Legal Proceedings. . . . . Not Applicable
<PAGE>
Part B Statement of
- ------ Additional Information Caption
---------------------------------
Item 10. Cover Page . . . . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . . . Table of Contents
Item 12. General Information and
History . . . . . . . . . . . . . General Information
Item 13. Investment Objectives and
Policies . . . . . . . . . . . . . Investment Policies; Limiting
Investment Risks
Item 14. Management of the Registrant . . . Management
Item 15. Control Persons and Principal
Holders of Securities . . . . . . Management; Capital Stock
Item 16. Investment Advisory and
Other Services . . . . . . . . . . Management; Custodian and
Transfer Agent; Independent
Accountants
Item 17. Brokerage Allocation and
Other Practices . . . . . . . . . Portfolio Transactions
Item 18. Capital Stock and Other
Securities . . . . . . . . . . . . Capital Stock
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered . . . Purchase of Shares (Part A);
Redemption of Shares (Part A);
Determination of Net
Asset Value; Shareholder Services
Item 20. Tax Status . . . . . . . . . . . . Federal Income Taxes
Item 21. Underwriters . . . . . . . . . . . Management
Item 22. Calculation of Performance Data. . Performance Data
Item 23. Financial Statements . . . . . . . Financial Statements
<PAGE>
SALOMON BROTHERS
OPPORTUNITY FUND INC
Prospectus
January 2, 1996
<PAGE>
SALOMON BROTHERS OPPORTUNITY FUND INC
A No-Load Mutual Fund
7 World Trade Center, New York, New York 10048
(800) 725-6666 or (212) 783-1301
Salomon Brothers Opportunity Fund Inc (the "Fund") is an open-end, no-load,
non-diversified investment company. The Fund seeks to achieve above average
long-term capital appreciation through investments principally in common
stocks, or securities convertible into or exchangeable for common stocks, which
are believed to be undervalued. Current income is a secondary objective. The
Fund may employ the speculative investment techniques of leveraging and
investing in restricted securities and other securities of limited
marketability. There can be no assurance that the Fund's objectives will be
achieved.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. This Prospectus should be read and
retained for ready reference to information about the Fund. A Statement of Ad-
ditional Information dated January 2, 1996, containing additional information
about the Fund (the "Statement of Additional Information"), has been filed with
the Securities and Exchange Commission and is hereby incorporated by reference
into this Prospectus. It is available without charge and can be obtained by
writing or calling the Fund at the address and telephone number printed above.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary 2
The Fund's Expenses 3
Financial Highlights 4
The Fund's Performance 4
Investment Objectives 6
Investment Policies 6
Limiting Investment Risks 8
Management 9
</TABLE>
<TABLE>
<S> <C>
Determination of Net Asset Value 9
Purchase of Shares 10
Redemption of Shares 11
Dividends, Distributions and Income
Taxes 13
Shareholder Services 15
Exchange Privilege 15
Account Services 16
Capital Stock 16
</TABLE>
SALOMON BROTHERS ASSET MANAGEMENT INC--INVESTMENT MANAGER
SALOMON BROTHERS INC--DISTRIBUTOR
JANUARY 2, 1996
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
SUMMARY
THE FUND
Salomon Brothers Opportunity Fund Inc, formerly Lehman Opportunity Fund, Inc.
(the "Fund"), an open-end, no-load, non-diversified investment company, was in-
corporated in Maryland on October 13, 1978.
INVESTMENT OBJECTIVES
The Fund's primary objective is to achieve above average long-term capital ap-
preciation. Current income is a secondary objective.
INVESTMENT MANAGER
Salomon Brothers Asset Management Inc ("SBAM") is the Fund's investment manag-
er. SBAM is also the investment manager to other investment companies and nu-
merous individuals and institutions. The Fund pays SBAM an annual management
fee of 1% of the Fund's average daily net assets.
PURCHASE OF SHARES
Shares may be purchased at net asset value without a sales charge (i) through
First Data Investor Services Group, Inc., a subsidiary of First Data
Corporation ("FDISG"), the Fund's transfer agent, (ii) through Salomon Brothers
Inc ("Salomon Brothers"), the Fund's distributor, or (iii) from a selected
dealer. The minimum initial investment is $1,000. Additional investments
require a minimum of $100. Investments for retirement plans are subject to a
$250 minimum initial investment requirement. See "Purchase of Shares".
SALE OF SHARES
The Fund redeems shares at net asset value. There is no redemption fee. See
"Redemption of Shares".
DIVIDENDS
The Fund intends to distribute annually substantially all of its net investment
income and capital gains, which will be reinvested in additional shares of the
Fund unless a shareholder requests otherwise. See "Dividends, Distributions and
Income Taxes".
CERTAIN FACTORS TO BE CONSIDERED
The Fund may employ the speculative investment techniques of leveraging and in-
vesting in restricted securities and other securities of limited marketability.
Such techniques may subject the Fund to certain risks. Among other factors to
be considered by an investor are the non-diversified character of the Fund and
the right to invest in foreign securities. See "Investment Policies".
2
<PAGE>
THE FUND'S EXPENSES
The following expense table is provided to assist investors in understanding
the various costs and expenses that an investor will incur either directly or
indirectly as a shareholder of the Fund, based upon the Fund's actual operating
expenses for its most recent fiscal year which are calculated as a percentage
of average daily net assets. These are the only fund related expenses that an
investor bears.
<TABLE>
<S> <C>
Management fees 1.00%
Other expenses .18%
Total Fund operating expenses 1.18%
</TABLE>
"Management fees" in the above table represents investment advisory fees paid
to SBAM. The nature of SBAM's services is described under "Management". Pursu-
ant to a Sub-Administration Agreement, SBAM remits a portion of its management
fee (equal to .08% of the Fund's average daily net assets) to FDISG.
"Other expenses" in the above table includes fees for shareholder services,
custodial fees, legal and accounting fees, printing costs and registration
fees.
EXAMPLE: The following example demonstrates the projected dollar amount of to-
tal cumulative expenses that would be incurred over various periods with re-
spect to a hypothetical investment in the Fund. These amounts are based upon
payment by the Fund of operating expenses at the levels set forth in the pre-
ceding table and are also based upon the following assumptions:
A shareholder would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
After 1 year $ 12
After 3 years $ 37
After 5 years $ 65
After 10 years $143
This example should not be considered a representation of past or future ex-
penses and actual expenses may be greater or less than those shown. Moreover,
while this example assumes a 5% annual return, the Fund's performance will vary
and may result in a return greater or less than 5%.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following data per share of capital stock outstanding throughout each
period and ratios should be read in conjunction with the financial statements
of the Fund contained in the Statement of Additional Information. The financial
statements and financial highlights of the Fund for each of the ten years in
the period ended August 31, 1995 have been audited by Price Waterhouse LLP,
whose unqualified report thereon is included in the Statement of Additional
Information.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990+ 1989 1988 1987 1986
-------- -------- -------- -------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning $31.47 $31.91 $27.64 $25.16 $21.06 $28.37 $23.39 $29.53 $27.87 $23.73
of year................. ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income... .45 .42 .57 .36 .54 .60 .81* .56 .54 .53
Net gains (or losses) on
securities (both
realized 5.68 1.48 4.85 2.79 4.205 (6.20) 6.29 (3.00) 4.49 5.48
and unrealized)......... ------ ------ ------ ------ ------ ------- ------ ------- ------ ------
Total from investment 6.13 1.90 5.42 3.15 4.745 (5.60) 7.10 (2.44) 5.03 6.01
operations.............. ------ ------ ------ ------ ------ ------- ------ ------- ------ ------
Less dividends and
distributions:
Dividends from net
investment income....... (.37) (.64) (.345) (.50) (.63) (.82) (.54) (.755) (.585) (.475)
Distributions from net
realized gain on (1.48) (1.70) (.805) (.17) (.015) (.89) (1.58) (2.945) (2.785) (1.395)
investments............. ------- ------- ------- ------ ------ ------ ------- ------- ------- -------
Total dividends and (1.85) (2.34) (1.15) (.67) (.645) (1.71) (2.12) (3.70) (3.37) (1.87)
distributions........... ------- ------- ------- ------ ------ ------- ------- ------- ------- -------
Net asset value, end of $35.75 $31.47 $31.91 $27.64 $25.16 $21.06 $28.37 $23.39 $29.53 $27.87
year.................... ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total investment return
based on net asset value
per share............... +21.1% +6.4% +20.2% +12.9% +23.2% -20.6% +32.9% -6.1% +21.2% +26.9%
Ratios/Supplemental
Data:
Net assets end of period
(thousands)............. $131,237 $118,755 $116,607 $101,679 $102,916 $90,049 $119,250 $92,608 $113,579 $110,151
Ratio of expenses to
average net assets...... 1.18% 1.22% 1.23% 1.25% 1.30% 1.26% 1.19% 1.20% 1.16% 1.16%
Ratio of net investment
income to average net
assets.................. 1.39% 1.29% 1.86% 1.28% 2.31% 2.38% 3.20% 2.29% 1.92% 2.44%
Portfolio turnover rate. 8% 13% 10% 11% 11% 13% 15% 29% 25% 28%
</TABLE>
- --------
* Includes $.27 per share of special dividends received in connection with cor-
porate actions on certain portfolio companies.
+ Since May 1, 1990, the Fund has been managed by SBAM. Prior thereto, the Leh-
man Management Company division of Shearson Lehman Brothers Inc. served as
the Fund's investment manager.
THE FUND'S PERFORMANCE
TOTAL RETURN
From time to time, the Fund may advertise its "average annual total return"
over various periods of time. Such total return figures show the average annual
percentage change in value of an investment in the Fund from the beginning date
of the measuring period to the end of the measuring period. These figures re-
flect changes in the price of the Fund's shares and assume that any income div-
idends and/or capital gains distributions made by the Fund during the period
were reinvested in shares of the Fund. Figures will be given for the most cur-
rent one, five and ten-year periods and may be given for other periods as well,
such as on a year-by-year basis. When considering "average" total return fig-
ures for periods longer than one year, it is important to note that the Fund's
annual total return for any one year in the
4
<PAGE>
period might have been greater or less than the average for the entire period.
The Fund may also use "aggregate" total return figures for various periods,
representing the cumulative change in value of an investment in the Fund for
the specified period (again reflecting changes in Fund share prices and assum-
ing reinvestment of dividends and distributions). Aggregate total returns may
be shown by means of schedules, charts, or graphs, and may indicate subtotals
of the various components of total return (i.e., change in value of initial in-
vestment, income dividends, and capital gains distributions).
The Fund's average annual total return was as follows for the fiscal periods
ending August 31:
1 year+ 21.10%
5 years+ 16.58%
10 years+ 12.61%
Furthermore, in reports or other communications to shareholders or in advertis-
ing material, the Fund may compare its performance with that of other mutual
funds as listed in the rankings prepared by Lipper Analytical Services, Inc. or
similar independent services which monitor the performance of mutual funds,
other industry or financial publications or financial indices such as the Stan-
dard & Poor's 500 Stock Index. It is important to note that the total return
figures set forth above are based on historical earnings and are not intended
to indicate future performance. The Statement of Additional Information further
describes the method used to determine the Fund's performance. The Fund's An-
nual Report dated August 31, 1995 containing performance information is avail-
able without charge and can be obtained by writing or calling the Fund at the
address or telephone number printed on the front cover.
Investment results for each of the Fund's fiscal years and its cumulative in-
vestment results are shown in the table below.
<TABLE>
<CAPTION>
ANNUAL CUMULATIVE
--------------------- ---------------------
SALOMON BROTHERS SALOMON BROTHERS
OPPORTUNITY FUND INC OPPORTUNITY FUND INC
--------------------- ---------------------
CAPITAL GAINS TOTAL CAPITAL GAINS TOTAL
YEAR ENDED AUGUST 31 REINVESTED RETURN+ REINVESTED RETURN+
-------------------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
1979*........................... +12.0% +12.0% + 12.0% + 12.0%
1980............................ +20.8 +23.9 + 35.3 + 38.8
1981............................ + 4.4 + 7.4 + 41.2 + 49.1
1982............................ - 5.3 - 2.0 + 33.7 + 46.1
1983............................ +61.0 +66.4 +115.3 +143.1
1984............................ +10.2 +12.5 +137.3 +173.5
1985............................ +25.2 +27.8 +197.2 +249.4
1986............................ +24.5 +26.9 +270.0 +343.4
1987............................ +18.6 +21.2 +338.9 +437.8
1988............................ - 9.1 - 6.2 +299.0 +404.5
1989............................ +29.9 +32.9 +418.3 +570.5
1990............................ -23.1 -20.6 +298.6 +432.4
1991............................ +19.6 +23.2 +376.7 +555.9
1992............................ +10.6 +12.9 +427.2 +640.5
1993............................ +18.7 +20.2 +525.8 +790.1
1994............................ + 4.3 + 6.4 +552.7 +847.1
1995............................ +19.6 +21.1 +680.6 +1046.9
</TABLE>
* From commencement of Fund's operations on February 28, 1979.
+ Income dividends and capital gain distributions reinvested.
5
<PAGE>
The results of the Fund, as shown above, do not take into account income taxes
payable by shareholders on income dividends and capital gain distributions.
During the above periods, stock prices fluctuated and the investment results
should not be considered as a representation of future results based upon an
investment made in the Fund today.
INVESTMENT OBJECTIVES
The primary investment objective of the Fund is to achieve above average long-
term capital appreciation. The Fund invests principally in common stocks, or
securities convertible into or exchangeable for common stocks, believed by the
investment manager to be undervalued. Current income is a secondary objective.
There is no assurance that the Fund will achieve its investment objectives.
The Fund believes that its shares are a suitable investment for certain insti-
tutional investors, including employee benefit funds, as well as for individu-
als with substantial investment portfolios; however, the Fund should not be
viewed as a complete investment program.
INVESTMENT POLICIES
In seeking long-term capital appreciation, the Fund may invest in securities of
companies whose share prices are believed to reflect inadequately the under-
lying value of the assets or potential earning power of the company. Although
the Fund may receive current income from dividends, interest and other sources,
income is a secondary consideration to seeking capital appreciation. The Fund
seeks to obtain results above those of relevant published indicators. In ana-
lyzing potential and existing investments, SBAM considers, among other factors:
1. The effect of changes in management, policies, corporate control or capital-
ization on the company's earnings or on the market price of its shares;
2. The effect on earnings, or on the market's evaluation of the company's fu-
ture, of changes in technology, marketing or production, the development of new
products or services or in the demand for existing products or services;
3. The effect of recent and anticipated capital expenditures; and
4. The effect of social, economic, political, legal and international develop-
ments.
In pursuit of its objectives, the Fund may invest in securities of seasoned,
established companies or in securities of relatively small new companies. Port-
folio securities may have extended public markets or may have limited market-
ability and be subject, therefore, to wide fluctuations in market value.
The Fund intends to invest primarily in common stocks, or securities convert-
ible into or exchangeable for common stocks, such as convertible preferred
stocks or convertible debentures. When management deems it appropriate, for
temporary defensive purposes due to economic or market conditions, the Fund may
also invest without limitation in fixed-income securities or hold assets in
cash or cash equivalents, such as U.S. Government obligations, investment grade
debt securities and other money market instruments. Investment grade debt secu-
rities are debt securities rated BBB or better by Standard & Poor's Corporation
("S&P") or Baa or better by Moody's Investors Service, Inc. ("Moody's"), or if
rated by other rating agencies or if unrated, securities deemed by the Fund's
investment manager to be of comparable quality. Debt securities rated BBB by
S&P are regarded by S&P as having an adequate capacity to pay interest and re-
pay principal, while debt securities rated Baa by Moody's are regarded by
Moody's as medium grade obligations and as having speculative characteristics.
Investments in such fixed-income securities may also be made for the purpose of
capital appreciation, as in the case of purchases of bonds traded at a substan-
tial discount.
6
<PAGE>
The Fund from time to time may invest up to 5% of its net assets in debt secu-
rities rated below investment grade by S&P and Moody's, with no minimum rating
required, or comparable unrated securities. For additional information on these
"high-yield" debt securities, which may involve a high degree of risk, see the
Statement of Additional Information under "Investment Policies".
To the extent that the Fund's portfolio may include securities of limited mar-
ketability, the price obtainable for such securities could be affected ad-
versely if the Fund was forced to sell under inexpedient circumstances, e.g.,
to satisfy sizable redemptions. Furthermore, where the Fund has a substantial
position in securities with limited trading markets, the activities of the Fund
itself, as well as those of other investors, could have an adverse effect upon
the liquidity and marketability of such securities and the Fund might not be
able to dispose of its holdings at the then current market prices. "Limited
marketability" may exist if the Fund has a substantial position in securities
that trade in a limited market, or if the securities are "restricted" in the
hands of the Fund (see "Limiting Investment Risks"), and thus are not readily
marketable without registration under the Securities Act of 1933, as amended
(with its attendant expenses and delays). In addition to the restrictions set
forth under "Limiting Investment Risks", the Fund will not invest more than 10%
of the value of its total assets in illiquid securities, such as "restricted
securities" and securities that are not readily marketable.
As a non-diversified investment company, the Fund may invest more than 5% of
the value of its assets in the obligations of any single issuer, subject to the
diversification requirements of subchapter M of the Internal Revenue Code of
1986, as amended. To the extent the Fund invests a relatively high percentage
of its assets in the securities of a limited number of issuers, the Fund may be
more susceptible to any single economic, political or regulatory occurrence
than a more widely diversified fund.
Among other factors to be considered by the investor are the Fund's right to
invest in foreign securities or American Depositary Receipts which are publicly
traded in the United States (the intention is to limit the investment in for-
eign securities not publicly traded in the United States to no more than 5% of
the value of the Fund's average net assets) and its right, subject to the limi-
tations set forth below, to borrow for purposes of investment. Investment in
securities of foreign issuers may involve risks arising from non-U.S. account-
ing, auditing and financial reporting standards, from restrictions on foreign
investment and repatriation of capital, from differences between U.S. and for-
eign securities markets, including less volume, price volatility in and rela-
tive illiquidity of foreign securities markets, different trading and settle-
ment practices and less government supervision and regulation, from economic,
social and political conditions, and, as with domestic multinational
corporations, from fluctuating exchange rates. Additionally, certain amounts of
the Fund's income may be subject to withholding taxes in the foreign countries
in which it invests.
BORROWING
The Fund may borrow money for either investment ("leveraging") or temporary
purposes. Borrowings shall be from banks only. Borrowings (excluding temporary
borrowings) may be secured by up to 33 1/3% of the value of the Fund's total
assets. Temporary borrowings in an additional amount of up to 5% of the Fund's
total assets may be made, for example, to meet redemption requests at a time
when disposition of portfolio securities is deemed undesirable.
Borrowing can increase the opportunity for capital appreciation when security
prices rise and increase the risk of loss when prices de-
7
<PAGE>
cline. Interest costs of borrowing are an expense that otherwise would not be
incurred and this could reduce the net investment income of the Fund.
The foregoing investment policies (other than the policies of the Fund with re-
spect to the borrowing of money and investing in restricted securities) are not
fundamental and may be changed by the Board of Directors of the Fund without
the approval of shareholders.
LENDING OF PORTFOLIO SECURITIES
From time to time, the Fund may lend portfolio securities to selected member
firms of the New York Stock Exchange ("NYSE"). Such loans will not exceed 10%
of the Fund's total assets, taken at value. Loans of portfolio securities by
the Fund will be collateralized by cash which will be maintained at all times
in an amount equal to at least 100% of the market value of the securities lent.
The risk of lending portfolio securities, as with other extensions of credit,
consists of possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially.
LIMITING INVESTMENT RISKS
The Fund may not:
(1) Invest: (i) more than 25% of the value of its total assets in the securi-
ties of any single issuer (other than the United States Government or its agen-
cies or instrumentalities) or in the securities of issuers in any one industry
or (ii) as to 50% of the value of its total assets, invest more than 5% of the
value of its total assets in the securities of any one issuer (other than the
United States Government or its agencies or instrumentalities) or acquire more
than 10% of the outstanding voting securities of any one issuer;
(2) Borrow money or pledge its assets, except as described under "Investment
Policies-- Borrowing";
(3) Underwrite securities, except in instances where the Fund has acquired
portfolio securities which it may not be free to sell publicly without regis-
tration under the Securities Act of 1933, as amended ("restricted securities");
in such registrations, the Fund may technically be deemed an "underwriter" for
purposes of that Act. (It is the Fund's present intention not to acquire re-
stricted securities unless the Fund also receives contractual registration
rights. In any event, no more than 10% of the value of the Fund's total assets
may be invested in illiquid securities.);
(4) Make loans of cash or other assets provided that (i) this restriction shall
not prevent the Fund from buying a portion of an issue of bonds, debentures or
other obligations which are publicly distributed, or from investing up to an
aggregate of 10% (including investments in other types of restricted securi-
ties) of the value of its total assets in portions of issues of bonds, deben-
tures or other obligations of a type privately placed with financial institu-
tions, and (ii) this restriction shall not prohibit the Board of Directors of
the Fund from authorizing the lending of portfolio securities to selected mem-
bers of the NYSE on a demand basis and fully collateralized by cash so long as
such loans do not exceed 10% of the Fund's total assets;
(5) Purchase more than 3% of the stock of another investment company, or pur-
chase stock of other investment companies equal to more than 5% of the Fund's
net assets in the case of any one other investment company and 10% of such net
assets in the case of all other investment companies in the aggregate. Any such
purchase will be made only in the open market where no profit to a sponsor or
dealer results from the purchase, except for the customary broker's commission.
This restriction shall not apply to investment company securities received or
acquired by the Fund pursuant to a merger or plan of reorganization. (The re-
turn on such investments will be reduced by the oper- ating expenses, including
management fees, of
8
<PAGE>
such investment company, and will be further reduced by the Fund's expenses;
that is, there will be a layering of certain fees and expenses.); or
(6) Invest more than 10% of the value of the Fund's total assets in securities
of unseasoned issuers, including their predecessors, which have been in opera-
tion for less than three years.
The foregoing investment restrictions and those described in the Statement of
Additional Information are fundamental policies of the Fund which may be
changed only when permitted by law and approved by the holders of a majority of
the outstanding voting securities of the Fund (as defined in the Investment
Company Act of 1940, as amended (the "1940 Act")).
MANAGEMENT
Since May 1, 1990, SBAM has served as the Fund's investment manager. SBAM is an
indirect wholly owned subsidiary of Salomon Inc. Together with affiliates in
London, Frankfurt and Hong Kong, SBAM provides a broad range of fixed-income
and equity investment advisory services to various individuals and institu-
tional clients located throughout the world, and serves as investment adviser
to various investment companies. Irving Brilliant is primarily responsible for
day-to-day management of the Fund's portfolio. Mr. Brilliant has been the
Fund's President and portfolio manager since 1979. Since 1990, he has been a
Director of Salomon Brothers and an employee of SBAM, and prior to 1990 he was
a Senior Vice President of the Lehman Management Co. Division of Shearson Leh-
man Brothers Inc.
Subject to policy established by the Board of Directors of the Fund, which has
overall responsibility for the business affairs of the Fund, SBAM manages the
operations of the Fund pursuant to a management contract (the "Management Con-
tract") with the Fund. SBAM also furnishes office space and certain facilities
required for conducting the business of the Fund and SBAM pays the compensation
of the officers, employees and directors of the Fund who are affiliated with
SBAM. The management fee paid to SBAM for the fiscal year ended August 31, 1995
represented 1% of the Fund's average daily net assets during that year. This
fee is at a higher rate than the management fees paid by most other investment
companies. Except for the expenses paid by SBAM that are described herein, the
Fund bears all costs of its operations.
Pursuant to a Sub-Administration Agreement between SBAM and FDISG, FDISG per-
forms certain administrative services in connection with the operation of the
Fund. As compensation for its services and at no additional cost to the Fund,
SBAM pays FDISG a fee each month at an annual rate of .08% of the average daily
value of the Fund's net assets.
Consistent with the Rules of Fair Practice of the National Association of Secu-
rities Dealers, Inc., and subject to seeking the most favorable price and exe-
cution available, SBAM may consider sales of shares of the Fund as a factor in
the selection of brokers to execute portfolio transactions for the Fund. The
Fund may use Salomon Brothers, an indirect wholly owned subsidiary of Salomon
Inc, to execute portfolio transactions when SBAM believes that the broker's
charge for the transaction does not exceed the usual and customary levels
charged by other brokers in connection with comparable transactions involving
similar securities. See the Statement of Additional Information for a more com-
plete description of the Fund's policies with respect to portfolio transac-
tions.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share for the purpose of pricing purchase and
redemption orders is determined at the close of regular business of the NYSE on
each day the Fund is open for business. The Fund is open for business on each
day the NYSE is open for trading, i.e. Monday through Friday with the exception
9
<PAGE>
of New Year's Day, Presidents' Day, Good Fri- day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day, and the preceding Friday or
subsequent Monday when one of those holidays falls on a Saturday or Sunday, re-
spectively. The net asset value per share is computed by dividing the value of
the net assets of the Fund (i.e. the value of the assets less the liabilities)
by the total number of Fund shares outstanding. In calculating net asset value,
all portfolio securities will be valued at market value when there is a reli-
able market quotation available for the securities and otherwise as the Board
of Directors of the Fund in good faith deems appropriate.
PURCHASE OF SHARES
Shares of the Fund may be purchased through FDISG, through Salomon Brothers,
the distributor of the Fund, or from selected dealers. All investments will be
made at the net asset value per share next determined after receipt of a pur-
chase order. Shares are entitled to dividends declared beginning on the day af-
ter the purchase order is received in good order.
The minimum initial investment in Fund shares is $1,000 and subsequent invest-
ments may be made in amounts of $100 or more. Investments for retirement plans
made available by the Fund are subject to a $250 minimum initial investment re-
quirement. The minimum investment requirements may be waived or lowered for in-
vestments effected on a group basis by certain other entities and their employ-
ees such as pursuant to a payroll deduction plan. The Fund reserves the right
to reject any purchase order in whole or in part.
To make an initial purchase of shares of the Fund through FDISG, send a com-
pleted Purchase Application with your check made payable to Salomon Brothers
Opportunity Fund Inc, c/o First Data Investor Services Group, Inc., P.O. Box
9109, Boston, Massachusetts 02205-9109. Subsequent investments should be sent
to FDISG at the same address. Share holders should be sure to write the Fund
account number on the check. If an investor's purchase check is not collected,
the purchase will be cancelled and FDISG will charge a fee of $10 to the share-
holder's account. FDISG does not intend to resubmit such checks for collection.
Purchase orders placed through Salomon Brothers for brokerage accounts and re-
ceived before the close of regular trading on the NYSE on any day that the Fund
is open, including orders for which payment is to be made from free cash credit
balances in brokerage accounts at Salomon Brothers, generally will be executed
at the net asset value next determined that day (the "trade date"). Purchase
orders received by Salomon Brothers after the close of regular trading on the
NYSE on any day that the Fund is open generally will be executed at the net as-
set value determined on the next day the Fund is open. Payment generally is due
to Salomon Brothers on the settlement date (i.e., the third business day after
the trade date). When payment is made to Salomon Brothers by an investor before
the settlement date, unless otherwise directed by an investor, the monies will
be held as a free credit balance in the investor's brokerage account and Salo-
mon Brothers will benefit from the temporary use of these monies. The Board of
Directors of the Fund has been advised of the benefits to Salomon Brothers re-
sulting from the settlement procedures and will take such benefits into consid-
eration when reviewing the Management Contract and the Distribution Agreement
for continuance.
Salomon Brothers may enter into dealer agreements with selected dealers. Pur-
chases of shares made through a selected dealer should be made in accordance
with the procedures prescribed by such selected dealer.
10
<PAGE>
Orders for the purchase of Fund shares received by selected dealers by the
close of reg- ular trading on the NYSE on any day that the Fund calculates its
net asset value and transmitted to Salomon Brothers by the close of its busi-
ness day (normally 5:00 p.m., New York time) will be priced according to the
net asset value determined on that day. Otherwise, the orders will be priced as
of the time the net asset value is next determined. It is the dealers' respon-
sibility that orders are transmitted so as to be received by Salomon Brothers
prior to the close of its business day.
Although most shareholders elect not to receive stock certificates, certifi-
cates for full shares can be obtained on specific written request at no cost to
the shareholder. No certificates will be issued for fractional shares.
Dividends and capital gain distributions are reinvested automatically in addi-
tional shares of the Fund at the net asset value next determined after the rec-
ord date and such shares are automatically credited to a shareholder's account,
unless FDISG or an SBAM Representative is informed by notice that a shareholder
wishes to receive such dividends or distributions in cash. The shareholder may
change such distribution option at any time by notification to FDISG or an SBAM
Representative prior to the record date of any such dividend or distribution.
Investors who purchase and redeem Fund shares through broker-dealers, banks and
other institutions may be subject to fees imposed by those entities with re-
spect to the services they provide. Orders placed by an investor directly with
FDISG or Salomon Brothers will not be subject to such fees.
REDEMPTION OF SHARES
Shareholders may redeem all or any part of their shareholdings at the net asset
value of such shares. THERE IS NO REDEMPTION CHARGE. The price at which shares
will be redeemed is the net asset value per share next determined after the re-
ceipt of proper redemption instructions.
Under the Fund's present policy, it reserves the right to redeem, upon not less
than 30 days' notice, the shares in an account which has a value of less than
$1,000 based on such shareholder's original cost (i.e., without giving effect
to changes in value caused by fluctuations in the value of portfolio securi-
ties). However, any shareholder affected by the exercise of this right will be
allowed to make additional investments prior to the date fixed for redemption
to avoid liquidation of the account.
The value of shares on redemption may be more or less than the investor's cost,
depending on the net asset value of the Fund's shares at the time of redemp-
tion.
Payment of the redemption price must be made within seven days after receipt of
the redemption instructions in good order, but the Fund may suspend the right
of redemption during any period when (a) trading on the NYSE is restricted
or the NYSE is closed, other than customary weekend and holiday closings; (b)
the Securities and Exchange Commission has by order permitted such suspension;
or (c) an emergency, as defined by rules of the Securities and Exchange Commis-
sion, exists making disposal of portfolio securities or determination of the
value of net assets of the Fund not reasonably practicable. No redemption re-
quests will be processed until the Fund has received a completed Purchase Ap-
plication, and no redemption of shares purchased by check will be permitted un-
til all checks in payment for the purchase of the shares to be redeemed have
been collected, which may take up to 15 days.
REDEMPTIONS BY MAIL FOR FDISG ACCOUNTS
Shares may be redeemed by submitting a written request to FDISG which meets all
the following requirements:
(1) Written instructions from registered owner(s), signed exactly as shares are
registered;
11
<PAGE>
(2) All certificates, if any, to be redeemed;
(3) If shares to be redeemed have a net asset value of $50,000 or more, a let-
ter or a stock power signed by the registered owner(s) with the signature(s)
guaranteed by an acceptable guarantor. A guarantee of each shareholder's signa-
ture is required for all redemptions, regardless of the amount involved, when
the proceeds are to be paid to someone other than the registered owner(s) of
the shares redeemed, are to be wired to a bank or are to be sent to other than
the registered address. Any one of the following guarantors is normally accept-
able: (a) a commercial or savings bank which is a member of the Federal Deposit
Insurance Corporation; (b) a trust company; (c) a member firm of a domestic
stock exchange; or (d) a foreign branch of any of the above. FDISG will not ac-
cept dated guarantees or guarantees from a notary public; and
(4) In the case of shares of record held in the name of a corporation, trust,
fiduciary or partnership, the redemption agent requires evidence of authority
to sign and a stock power with signature(s) guaranteed.
TO EXPEDITE PROCESSING OF REDEMPTIONS, SHAREHOLDERS SHOULD SUBMIT REDEMPTION
REQUESTS AND ALL RELATED DOCUMENTS DIRECTLY TO FIRST DATA INVESTOR SERVICES
GROUP, INC. P.O. BOX 9109, BOSTON, MASSACHUSETTS 02205-9109.
Unless other instructions are given in proper form, a check for proceeds of re-
demption will be sent to the shareholder's address of record if the shareholder
does not have a brokerage account.
REDEMPTIONS THROUGH SALOMON BROTHERS
Shareholders who have brokerage accounts may redeem shares by contacting an
SBAM Representative or a selected dealer. Redemption requests for brokerage ac-
counts received by Salomon Brothers in proper form prior to the close of regu-
lar trading on the NYSE on any day that the Fund calculates its net asset value
are effective that day. Redemption requests received after the close of trading
on the NYSE are effective at the net asset value per share next determined.
Proceeds of redemption will be credited to the shareholder's brokerage account.
A redeeming shareholder with a Salomon Brothers brokerage account may request a
check from Salomon Brothers or may elect to retain the redemption proceeds in
such shareholder's brokerage account. Salomon Brothers may benefit from the use
of the redemption proceeds prior to the clearance of a check issued to a re-
deeming shareholder for such proceeds or prior to disbursement or reinvestment
of such proceeds on behalf of the shareholder.
REPURCHASES THROUGH SELECTED DEALERS
In addition, Salomon Brothers will accept orders from dealers with which it has
sales agreements for the repurchase of shares held by investors. Repurchase or-
ders received by the dealer prior to the close of regular trading on the NYSE
on any business day and transmitted to Salomon Brothers prior to the close of
its business day (normally 5:00 p.m., New York time) are effective that day.
Otherwise, the shares will be repurchased at the net asset value next deter-
mined. It is the responsibility of the dealer to transmit orders on a timely
basis. The dealer may charge the investor a fee for executing the order. This
repurchase arrangement is discretionary and may be withdrawn or modified at any
time.
TELEPHONE REDEMPTION PRIVILEGE
Shareholders having direct accounts with FDISG may redeem shares by means of
the Telephone Redemption Privilege. The Application for Telephone Redemption
Privilege must be completed by the shareholder with the signature(s) guaranteed
in the manner described above under "Redemptions by Mail for FDISG Accounts"
prior to initiating a telephone redemption.
12
<PAGE>
Shareholders cannot apply the Telephone Redemption Privilege to shares held in
certificate form or for accounts requiring additional supporting documentation
for redemptions such as trust, corporate, estate and guardian accounts.
Proceeds from the telephone redemption will be forwarded to the shareholder by
check. The check will be made payable to the registered shareholder(s) and sent
to the address of record on file with FDISG.
The Fund reserves the right to refuse a telephone redemption if it is believed
advisable to do so. Procedures for redeeming Fund shares by telephone may be
modified at any time by the Fund. Neither the Fund nor FDISG will be liable for
following redemption instructions received by telephone, which are reasonably
believed to be genuine, and the shareholder will bear the risk of loss in the
event of unauthorized or fraudulent telephone instructions. The Fund and FDISG
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. In the absence of following these procedures, the Fund
and/or FDISG may be liable for any losses due to fraudulent instructions. When
requesting a redemption by telephone, shareholders should have available the
correct account registration and account number or tax identification number.
The Fund will not mail redemption proceeds for any shares until checks received
in payment for such shares have been collected, which may take up to 15 days or
more. A shareholder who anticipates the need for more immediate access to his
investment should purchase shares by federal funds or bank wire, or by certi-
fied or cashier's check.
REDEMPTION IN KIND
If the Board of Directors shall determine that it is in the best interests of
the remaining shareholders of the Fund, the Fund may pay the re demption price,
in whole or in part, by a distribution in kind from the portfolio of the Fund,
in lieu of cash, taking such securities at their values employed for
determining such redemption price, and selecting the securities in such manner
as the Board of Directors may deem fair and equitable. However, the Fund has
made an election pursuant to Rule 18f-1 under the 1940 Act requiring that all
redemptions be effected in cash to each redeeming shareholder, during any period
of 90 days, up to the lesser of $250,000 or 1% of the net assets of the Fund. A
shareholder who receives a distribution in kind may incur a brokerage
commission upon a later disposition of such securities. The Fund does not intend
to make a practice of redeeming shares in kind.
DIVIDENDS, DISTRIBUTIONS AND INCOME TAXES
The Fund complied during the fiscal year ended August 31, 1995 and intends to
comply in the future with the provisions of subchapter M of the Internal Reve-
nue Code of 1986, as amended (the "Code"), applicable to regulated investment
companies so that, among other things, as to any fiscal year in respect of
which it distributes all of its "investment company taxable income" as such
term is defined in the Code determined without regard to the deduction for div-
idends paid, the Fund will not be subject to federal income tax on investment
company taxable income and net realized capital gains distributed to sharehold-
ers. Each year the Fund will notify shareholders of the tax status of dividends
and distributions from the Fund. Dividends and distributions also may be sub-
ject to state and local taxes. If the Fund fails to qualify as a regulated in-
vestment company, it will be taxable as a corporation for federal, state and
city income tax purposes.
The Fund intends to distribute to shareholders annually substantially all of
its investment company taxable income and any capital gain net income realized
from the sale of securities (after deducting any net realized capital losses
13
<PAGE>
that may be carried forward from prior years). The Fund is subject to a non-de-
ductible 4% excise tax on the excess, if any, of certain required distributions
over the amounts actually distributed by the Fund. To the extent possible, the
Fund intends to make such additional distributions as are necessary to avoid
the imposition of this excise tax.
If a shareholder elects to receive dividends and/or distributions in cash and
the check cannot be delivered to a shareholder due to an invalid address or
otherwise remains uncashed by the shareholder for a period of six months, the
Fund reserves the right to reinvest the dividend and/or distribution in a
shareholder's account at the then-current net asset value and to convert the
shareholder's election to automatic reinvestment in shares of the Fund from
which the distributions were made.
Dividends and capital gains distributions, if any, will be reinvested in addi-
tional full and fractional shares of the Fund at net asset value, unless a
shareholder has previously requested that such dividends and distributions be
paid in cash. See "Purchase of Shares". Shareholders receiving distributions in
the form of shares will be treated as receiving a distribution in an amount
equal to the fair market value, determined as of the payment date, of the
shares received. For federal income tax purposes, distributions of investment
company taxable income and net short-term capital gains will be taxable to
shareholders at ordinary income rates. Distributions of net capital gains (i.e.
net long-term capital gains) designated by the Fund as capital gain dividends
will be taxable at capital gain rates, whether they are invested in additional
shares of the Fund or received in cash and regardless of the length of time the
shareholder has owned his shares; however, such dividends will not qualify for
the dividends received deduction, discussed below. In general, the maximum mar-
ginal tax rate imposed on capital gains of an individual is 28%. It is ex
pected that all or a portion of the Fund's distributions from investment com-
pany taxable income will be eligible for the 70% dividends received deduction
available to corporations.
Generally, shareholders will be taxable on dividends or distributions in the
year of receipt. However, if the Fund declares a dividend or distribution in
October, November or December to shareholders of record on a specified date in
such a month which is paid during the following January, it will be taxable to
shareholders in the year the dividend or distribution is declared. Upon the
sale or exchange of shares of the Fund, a shareholder will realize a taxable
gain or loss depending upon the amount realized and his basis in his shares.
Such gain or loss will be treated as a capital gain or loss if the shares are
capital assets in the shareholder's hands, and will be long-term or short-term
depending on the length of time the shareholder held such shares. Losses in-
curred by a shareholder on the sale of shares of the Fund held for six months
or less, however, will be recharacterized as long-term capital losses to the
extent the shareholder received a capital gain dividend.
Dividends and redemption proceeds paid by the Fund to a United States person
(as defined in the Code) are generally subject to the information reporting re-
quirements of the Code and may be subject to backup withholding at the rate of
31% unless the shareholder (i) is a corporation or other exempt holder or (ii)
provides a taxpayer identification number on a properly completed Form W-9 and
certifies that no loss of exemption from backup withholding has occurred.
Backup withholding is not an additional tax and any amount withheld may be
credited against the shareholder's federal income tax liability.
The foregoing is intended to be general information to shareholders and poten-
tial investors in the Fund and does not constitute tax advice.
14
<PAGE>
Shareholders and potential investors are urged to consult their own tax advis-
ers regarding federal, state, local and, if applicable, foreign tax implica-
tions of an investment in the Fund.
SHAREHOLDER SERVICES
The Fund offers the following shareholder services. See the Statement of Addi-
tional Information for further details about these services or call or write
the Fund.
EXCHANGE PRIVILEGE
Shareholders of the Fund may exchange all or part of their Fund shares for
shares of Salomon Brothers New York Municipal Money Market Fund and Salomon
Brothers Capital Fund. The exchange privilege is available to shareholders re-
siding in any state in which the shares of the Fund being acquired may be le-
gally sold. Exchanges of shares may be made at any time and without payment of
any exchange fee. The following is a description of the investment objectives
of the funds available for exchange:
Salomon Brothers New York Municipal Money Market Fund. A money market fund that
invests primarily in high-quality, short-term obligations issued by or on be-
half of the State of New York or by its instrumentalities or political subdivi-
sions with the goal of providing as high a level of current income exempt from
regular federal, New York State and New York City personal income taxes as is
consistent with liquidity and the stability of principal. Income may not be ex-
empt from certain state or local taxes.
Salomon Brothers Capital Fund. A Fund which seeks capital appreciation through
investments in securities, primarily common stocks, which are believed to have
above-average appreciation possibilities and which also may involve above-aver-
age risk.
The exchange of shares of one fund for shares of another fund is treated for
federal income tax purposes as a sale of the shares given in exchange by the
shareholder, and an exchanging shareholder may, therefore, realize a taxable
gain or loss in connection with an exchange.
Shareholders exercising the exchange privilege with any of the funds listed
above should review the prospectus of that fund carefully prior to making an
exchange. Further information regarding the exchange privilege is contained in
the Statement of Additional Information. To obtain the prospectuses of these
funds, shareholders should contact SBAM.
The Fund reserves the right to reject any exchange or to modify, restrict or
terminate the exchange privilege at any time.
AUTOMATIC WITHDRAWAL PLAN. With an Automatic Withdrawal Plan, a shareholder can
arrange for automatic distributions to be made monthly or quarterly in amounts
not less than $50. A Withdrawal Plan may be opened with an account having a to-
tal value of at least $7,500.
SELF-EMPLOYED RETIREMENT PLANS. A prototype defined contribution retirement
plan is available for self-employed individuals who wish to contribute out of
earned income on behalf of themselves and each of their employees to purchase
shares of the Fund.
IRAS. A prototype individual retirement account ("IRA") is generally available
for all working individuals who receive compensation (which for self-employed
individuals includes earned income) for services rendered, and for all individ-
uals who receive alimony or separate maintenance payments pursuant to a divorce
or separation instrument. Shareholders should consult with a financial adviser
regarding an IRA.
15
<PAGE>
ACCOUNT SERVICES
Shareholders are kept informed through annual and semi-annual reports showing
current investments and other financial data for the Fund. Annual reports in-
clude audited financial statements. Shareholders will receive a Statement of
Account following each share transaction. Shareholders can write or call the
Fund at the address and telephone number on the first page of this Prospectus
with any questions relating to their investment in Fund shares.
CAPITAL STOCK
The authorized capital stock of the Fund consists of 15,000,000 shares having a
par value of $.01 per share. All shares are of the same class, with like rights
and privileges. Each share is entitled to one vote and participates equally in
Fund dividends and distributions and in its net assets on liquidation. Each
shareholder is entitled to cast, at all meetings of shareholders, such number
of votes as is equal to the number of full and fractional shares held by such
share holder. Except when Directors are required to be elected under the 1940
Act, there will not be a regularly scheduled Annual Meeting of Stockholders.
The shares are fully paid and non-assessable when issued and have no prefer-
ence, pre-emptive, conversion or exchange rights. There are no options or other
special rights outstanding relating to any such shares. The Fund will not issue
any senior securities, except in connection with its borrowing activities. See
"Investment Policies--Borrowing".
16
<PAGE>
BOARD OF DIRECTORS OFFICERS
IRVING BRILLIANT
President of Salomon Brothers Opportunity Fund Inc IRVING BRILLIANT
President
BENITO GAGUINE
Attorney at Law
LAWRENCE H. KAPLAN
ROSALIND KOCHMAN
Administrator and Counsel Executive Vice
Kochman Eye Surgical Hospital President and General
Counsel
IRVING SONNENSCHEIN
Partner in the law firm of Sonnenschein, TANA E. TSELEPIS
Sherman & Deutsch Secretary
JENNIFER G. MUZZEY
Assistant Secretary
ALAN M. MANDEL
Treasurer
JANET S. TOLCHIN
Assistant Treasurer
17
<PAGE>
TELEPHONES
(212) 783-1301
(800) 725-6666
DISTRIBUTOR
Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
CUSTODIAN
Boston Safe Deposit and Trust Company
P.O. Box 9109
Boston, Massachusetts 02205-9109
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
First Data Investor Services Group, Inc.
P.O. Box 9109
Boston, Massachusetts 02205-9109
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
New York, New York 10036
LEGAL COUNSEL
Simpson Thacher & Bartlett
New York, New York 10017
No dealer, salesman or other person has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
in connection with the offer contained in this Prospectus, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund, the distributor or the investment manager.
This Prospectus does not constitute an offering in any state in which such of-
fering may not lawfully be made.
<PAGE>
SALOMON BROTHERS OPPORTUNITY FUND INC
A No-Load Mutual Fund
7 World Trade Center, New York, New York 10048
Telephones: (212) 783-1301 (New York State);
or (800) 725-6666
STATEMENT OF ADDITIONAL INFORMATION
Salomon Brothers Opportunity Fund Inc (the "Fund") is an open-end,
no-load, non-diversified investment company. The Fund seeks to achieve above-
average long-term capital appreciation through investments principally in common
stocks, or securities convertible into or exchangeable for common stocks, which
are believed to be undervalued. Current income is a secondary objective. The
Fund may employ the speculative investment techniques of leveraging and
investing in restricted securities and other securities of limited
marketability. There can be no assurance that the Fund's objectives will be
achieved.
This Statement of Additional Information is not a prospectus and is only
authorized for distribution when preceded or accompanied by the Fund's
prospectus dated January 2, 1996 (the "Prospectus"). This Statement of
Additional Information contains additional information to that set forth in the
Prospectus and should be read in conjunction with the Prospectus, additional
copies of which may be obtained without charge by writing or calling the Fund at
the address and telephone number printed above.
January 2, 1996
B-1
<PAGE>
Table of Contents
Page
----
Investment Policies ........................... 3
Limiting Investment Risks ..................... 6
Management .................................... 7
Portfolio Transactions ........................ 11
Determination of Net Asset Value .............. 12
Performance Data .............................. 13
Federal Income Taxes .......................... 13
Page
----
Shareholder Services .......................... 15
Custodian and Transfer Agent .................. 17
Independent Accountants ....................... 17
Experts ....................................... 17
Financial Statements .......................... 18
Report of Independent Accountants.............. 28
B-2
<PAGE>
Investment Policies
The following information supplements the discussion of the investment
policies of the Fund found under "Investment Policies" in the Prospectus.
Loans of Portfolio Securities
The Fund's Board of Directors may authorize the lending of portfolio
securities to selected member firms of the New York Stock Exchange. The
procedure for the lending of securities will include the following features and
conditions. The borrower of the securities will deposit cash with the Fund in an
amount equal to a minimum of 100% of the market value of the securities lent.
The Fund will invest the collateral in short-term debt securities or cash
equivalents and earn the interest thereon. A negotiated portion of the income so
earned may be paid as a fee to the broker or other person who arranged the loan.
If the deposit drops below the required minimum at any time, the borrower will
be called upon to post additional cash, so as to mark to market on a daily
basis. If the additional cash is not provided, the loan will be immediately due
and the Fund may use the collateral or its own cash to replace the securities by
purchase in the open market, charging any loss to the borrower. These will be
"demand" loans and may be terminated by the Fund at any time. The Fund will
receive any dividends and interest paid on the loaned securities, and the loans
will be structured to assure that the Fund will be able to exercise its voting
rights on the securities. Such loans will be authorized only to the extent that
such activity would not cause any adverse tax consequences to the Fund or its
shareholders and only in accordance with applicable rules and regulations.
Neither the brokers nor the borrowers may be affiliated, directly or indirectly,
with the Fund. Lending of portfolio securities is subject to the restrictions
set forth in paragraph (4) under "Limiting Investment Risks" in the Prospectus.
The Fund did not lend any of its portfolio securities during the fiscal year
ended August 31, 1995.
Put and Call Options
The Fund may purchase and write put and call options on securities and
securities indices provided such options are traded on a national securities
exchange and provided further that the value of options held and the value of
positions underlying options written do not exceed 10% of the Fund's total
assets. A put option gives the holder the right to sell to the writer, and a
call option gives the holder the right to buy from the writer, the number of
shares of the underlying security covered by the option at a stated exercise
price on or before a stated expiration date. Puts and calls, with respect to a
limited number of securities, currently may be purchased or written through the
facilities of certain national securities exchanges. In addition, each of such
exchanges provides a secondary market for "closing" options positions.
It will be the policy of the Fund to write call options only if the Fund
either (i) owns and will hold over the term of the option the underlying
securities against which the option is written (or securities convertible into
the underlying securities without additional consideration) or (ii) owns or will
hold a call on the same underlying security or securities. When a put option is
written by the Fund, the Fund will create and maintain a segregated
B-3
<PAGE>
account consisting of cash, U.S. government securities or high grade debt
securities equal to the option price.
The primary risk to the Fund as the writer of a covered call option is
that, unless a closing transaction is executed, the Fund must retain its
underlying cover position even if price movement would otherwise have caused the
Fund to dispose of that position, and must forgo opportunities for gain in
excess of the option premium which may result from favorable changes in the
value of the underlying cover position.
The primary risk to the Fund as the writer of a put option is that,
unless a closing transaction is executed, the Fund may be required to purchase
the underlying security or securities at a price above the market price at the
time of such purchase. When a put option is collateralized through the
maintenance of a segregated account, the contents of such account are not
available to the Fund for the general pursuit of the Fund's investment
objectives. The Fund will write put options only when it is believed that the
acquisition of the underlying security or securities would be in accordance with
the Fund's investment objectives.
The Fund may enter into closing purchase transactions in the secondary
markets in options maintained by the various exchanges. In such a transaction,
the Fund would buy an option similar to the one it had previously written. The
resulting transaction would have the effect of cancelling the Fund's pre-
existing obligation on the option written by it. The Fund has no assurance,
however, that a liquid secondary market will exist on any given day with respect
to options on a particular security. Therefore, there is no assurance that the
Fund will be able to enter into a closing transaction at any particular time.
In executing any closing purchase transaction, the Fund will incur the
expense of the premium (plus transaction costs) in order to effect the
transaction.
The Fund may purchase put or call options for speculative purposes in
pursuit of its objective of capital appreciation or, in the case of a put, to
hedge against an adverse price change in a portfolio position.
The primary risk in purchasing (as opposed to writing) an option is the
potential loss of investment (i.e., the premium for the option) in a relatively
short period of time if the underlying securities increase, in the case of a
put, or decrease, in the case of a call, in value. In such instances, the option
would not be exercised by the Fund and would become worthless at its expiration
date. If a secondary market for the option exists, the Fund may utilize closing
sale transactions analogous to the closing purchase transactions described above
with respect to the writing of options.
The Fund did not purchase or write any put or call options during the
fiscal year ended August 31, 1995, and has no present intention to do so. See
"Taxation of the Fund" for discussion of tax considerations.
B-4
<PAGE>
Investments in Foreign Securities
Investments in securities of foreign issuers may involve risks not
typically associated with investments in securities of U.S. issuers. The value
of any foreign securities held, and of any related income received, will be
affected by fluctuations in currency rates, exchange control regulations and, as
with domestic multinational corporations, from fluctuating interest rates. Most
foreign securities markets have substantially less trading volume and are
generally not as highly regulated and supervised as U.S. securities markets.
Securities of some foreign companies are less liquid and more volatile than
securities of comparable U.S. companies and are subject to different accounting,
auditing and financial reporting standards. In addition, there may be less
publicly-available information about a foreign issuer than about a U.S. issuer.
Political and economic conditions such as seizure or nationalization of assets,
establishment of exchange controls, expropriation or confiscatory taxation,
political changes, government regulation, social instability or diplomatic
developments could adversely affect the economy of a particular country and,
thus, the Fund's investments in that country. In the event of default on a
foreign security, it may be more difficult for the Fund to obtain or enforce a
judgment against the issuer of such obligation. Additionally, certain amounts of
the Fund's income may be subject to withholding taxes in the country in which it
invests. The Fund may not invest more than 5% of the value of the Fund's assets
in securities of foreign issuers which are not publicly traded in the United
States.
Low-Rated Securities
The Fund may invest in debt securities rated below investment grade by
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Rating Group
("S&P"), with no minimum rating required, and comparable unrated securities.
Such securities are generally referred to as "high-yield" or "junk" bonds, and
may involve a high degree of risk. The market for certain of these low-rated and
comparable unrated securities is relatively new. An economic recession could
disrupt the market for such securities and adversely affect their value and the
ability of issuers to repay principal and pay interest thereon.
While the market values of high-yield securities may tend to react less
to fluctuations in interest rate levels than the market values of higher-rated
securities, the market values of certain of these securities also tend to be
more sensitive to individual corporation developments and changes in economic
conditions, and thus will fluctuate over time. In addition, high-yield
securities generally present a higher degree of credit risk. Issuers of these
securities are often highly leveraged and may not have more traditional methods
of financing available to them so that their ability to service their debt
obligations during an economic downturn or during sustained periods of rising
interest rates may be impaired. The risk of loss due to default by such issuers
is significantly greater because high-yield securities generally are unsecured
and frequently are subordinated to the prior payment of senior indebtedness. The
Fund may also incur additional expenses to the extent that it is required to
seek recovery upon a default in the payment of principal or interest on its
portfolio holdings. The existence of limited markets for these securities may
diminish the Fund's ability to obtain accurate market quotations for purposes of
valuing such securities and calculating its net asset value as well as impair
the Fund's ability to dispose of such securities.
B-5
<PAGE>
The ratings of Moody's and S&P generally represent the opinions of those
organizations as to the quality of the securities that they rate. Such ratings,
however, are relative and subjective, are not absolute standards of quality, are
subject to change and do not evaluate the market risk of the securities.
Although Salomon Brothers Asset Management Inc ("SBAM") uses these ratings as a
criterion for the selection of securities for the Fund, SBAM also relies on its
independent analysis to evaluate potential investments for the Fund.
Portfolio Turnover
Flexibility of investment and emphasis on capital appreciation may
involve a greater portfolio turnover rate than that of investment companies
whose objective, for example, is production of income or maintenance of a
balanced investment position. While the rate of portfolio turnover cannot be
predicted with assurance and may vary from year to year, it is anticipated that
the Fund's annual portfolio turnover rate should not generally exceed 75%. A 75%
portfolio turnover rate would occur, for example, if during the course of a
given year the aggregate amount of purchases or sales (whichever is less) of
portfolio securities is equal in value to three-quarters of the monthly average
value of the Fund's portfolio during the year (excluding short-term
investments). See the table under "Financial Highlights" on page 4 of the
Prospectus for the portfolio turnover rates of the Fund.
Limiting Investment Risks
In addition to the restrictions described under "Limiting Investment
Risks" in the Prospectus, the Fund may not:
(1) Invest in companies for the purpose of exercising control of
management;
(2) Purchase securities on margin (except for such short-term credits as
are necessary for the clearance of transactions) or make short sales
of securities (except for sales "against the box" i.e., when a
security identical to the one owned by the Fund or which the Fund
has the right to acquire without payment of additional
consideration, is borrowed and sold short in order to defer a gain
or loss for federal income tax purposes);
(3) Purchase or sell real estate, interests in real estate, interests in
real estate investment trusts or commodities or commodity contracts;
however, the Fund may purchase interests in real estate investment
trusts or other companies which invest in or own real estate if the
securities of such trusts or companies are registered under the
Securities Act of 1933 and are readily marketable and may purchase
the securities of companies engaged in businesses which may involve
commodities or commodities futures contracts; or
(4) Write or purchase puts or calls on securities or securities indices
except as described under "Investment Policies - Put and Call
Options".
B-6
<PAGE>
The investment restrictions described above and in the Prospectus are
fundamental policies of the Fund and may be changed only when permitted by law
and approved by the holders of a majority of the Fund's outstanding voting
securities which, as defined by the Investment Company Act of 1940, as amended
(the "1940 Act"), means the lesser of (i) 67% of the voting securities
represented at a meeting at which more than 50% of the outstanding voting
securities are represented, or (ii) more than 50% of the outstanding voting
securities of the Fund.
The percentage limitations contained in the investment restrictions
described above and in the Prospectus and the description of the Fund's
investment policies are all applied solely at the time of any proposed
transaction on the basis of values or amounts determined at that time. Unless
otherwise specifically stated, a restriction would not be violated if a
percentage limitation were exceeded only as a result of changes in values or
amounts not resulting from a transaction subject to the restriction.
In order to permit the sale of the Fund's shares in certain states, the
Fund may make commitments more restrictive than the investment restrictions
described above. Accordingly, pursuant to such commitments, the Fund has
undertaken not to invest in warrants (other than warrants acquired by the Fund
as part of a unit or attached to securities at the time of purchase) if, as a
result, the investments (valued at the lower of cost or market) would exceed 5%
of the value of the Fund's net assets or if, as a result, more than 2% of the
Fund's net assets would be invested in warrants not listed on the American Stock
Exchange or the New York Stock Exchange. Further, the Fund has given a
representation that investments will not be made in real estate limited
partnerships or in exploration or development for oil, gas or mineral leases.
Should the Fund determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of its shares in the state involved.
Management
Directors and Officers
The principal occupations of the directors and executive officers of the
Fund for the past five years are listed below. The address of each, unless
otherwise indicated, is 7 World Trade Center, New York, New York 10048. Certain
of the officers are also officers of one or more other investment companies for
which SBAM, the Fund's investment manager, acts as investment adviser.
*IRVING BRILLIANT, Age 77, President and Director-- Director of Salomon
----------------------
Brothers Inc ("Salomon Brothers"), Employee of SBAM, since May 1990; formerly
Senior Vice President of Lehman Management Co. ("Lemco").
BENITO GAGUINE, Age 83, Director--1233 20th St., N.W. Suite 505,
--------
Washington, D.C. 20036. Attorney at Law.
B-7
<PAGE>
ROSALIND A. KOCHMAN, Age 57, Director--1301 Avenue J, Brooklyn, New York
--------
11230. Administrator and Counsel, Kochman Eye Surgical Hospital.
IRVING SONNENSCHEIN, Age 75, Director--10 Columbus Circle, New York,
--------
New York 10019. Partner in the law firm of Sonnenschein, Sherman & Deutsch.
LAWRENCE H. KAPLAN, Age 38, Executive Vice President and General
------------------------------------
Counsel--Vice President and Chief Counsel of SBAM and a Vice President of
- -------
Salomon Brothers since May 1995. Prior to May 1995, he was Senior Vice
President, Director and General Counsel of Kidder Peabody Asset Management, Inc.
and a Senior Vice President of Kidder, Peabody & Co. Incorporated since November
1990.
ALAN M. MANDEL, Age 38, Treasurer--Vice President of SBAM, since January
---------
1, 1995; Chief Financial Officer of Hyperion Capital Management from October
1991 to December 1994; Assistant Treasurer of Paine Webber/Mitchell Hutchins
Asset Management from 1987 to October 1991.
TANA E. TSELEPIS, Age 60, Secretary--Vice President and Senior
---------
Administrator of Salomon Brothers and Employee of SBAM since October 1989;
formerly Vice President and Senior Administrator at First Boston Asset
Management Corporation.
JANET S. TOLCHIN, Age 37, Assistant Treasurer--Employee of SBAM, since
-------------------
May 1990; formerly Vice President of Lemco.
JENNIFER G. MUZZEY, Age 36, Assistant Secretary--Employee of SBAM since
-------------------
June 1994; formerly Assistant Vice President of SunAmerica Asset Management
Corporation prior to June 1994.
Directors of the Fund not affiliated with SBAM receive from the Fund a
fee for each Board of Directors and Board committee meeting attended and are
reimbursed for out-of-pocket expenses relating to attendance at meetings.
Directors who are affiliated with SBAM do not receive compensation from the Fund
but are reimbursed for out-of-pocket expenses relating to attendance at
meetings.
- ----------
* "Interested person" as defined in the 1940 Act.
As of November 30, 1995 directors and officers of the Fund as a group
beneficially owned 1,251,677 or approximately 34%, of the outstanding shares of
the Fund.
At November 30, 1995, to the knowledge of management, the following
persons owned beneficially more than 5% of the Fund's outstanding shares. Benito
Gaguine, a Director of the Fund, and his son, Bruce Gaguine, together with
family trusts were the beneficial owners of approximately 545,051 or
approximately 14%, of the outstanding shares of the Fund. In addition, Irving
Brilliant, a Director of the Fund as well as the Fund's President, and his wife,
Benise Brilliant, by virtue of their positions as trustees, were the together
with family trusts, was a beneficial owners of approximately 321,170 shares or
8%, of the outstanding shares of the Fund and Rosalind Kochman, a Director of
the Fund, and her husband Dr. Marvin
B-8
<PAGE>
Kochman, together were the beneficial owners of approximately 341,969 shares or
9% of the outstanding shares of the Fund.
The following table provides information concerning the compensation
paid during the fiscal year ended August 31, 1995 to each director of the Fund.
The Fund does not provide any pension or retirement benefits to directors. In
addition, no remuneration was paid during the fiscal year ended August 31, 1995
by the Fund to officers of the Fund or to Mr. Brilliant, who as an employee of
SBAM may be defined as an "interested person" under the 1940 Act.
<TABLE>
<CAPTION>
Aggregate Total Compensation
Name of Compensation from Other Funds Total
Person, Position from the Fund Advised by SBAM Compensation
- ---------------- ------------- ------------------ -----------------
Directorships Directorships (A)
<S> <C> <C> <C>
Benito Gaguine $1,500 $0 $1,500 (1)
Director
Rosalind A. Kochman $1,500 $0 $1,500 (1)
Director
Irving Sonnenschein $1,500 $0 $1,500 (1)
Director
</TABLE>
__________
(A) The numbers in parentheses indicate the applicable number of investment
company directorships held by that director.
Investment Manager
The Fund retains SBAM to act as its investment manager. SBAM is a wholly
owned subsidiary of Salomon Brothers Holding Company Inc, which is in turn a
wholly owned subsidiary of Salomon Inc. SBAM serves as the investment manager to
various individuals, institutions and other investment companies.
The management contract ("Management Contract") between SBAM and the
Fund provides that SBAM shall manage the operations of the Fund, subject to the
policies established by the Board of Directors of the Fund. The Management
Contract was last approved by the Board of Directors of the Fund (including a
majority of the "disinterested" Directors) on October 6, 1995. Pursuant to the
Management Contract, SBAM manages the Fund's investment portfolio, directs
purchases and sales of the Fund's portfolio securities and reports thereon to
the Fund's officers and directors regularly. SBAM also furnishes office space
and certain facilities required for conducting the business of the Fund and pays
the compensation of the Fund's officers, employees and directors affiliated with
SBAM. The Fund bears all other costs of its operations, including the
compensation of its directors not affiliated with SBAM.
As compensation for services performed under the Management Contract,
the Fund pays SBAM a management fee each month, at an annual rate of 1% (1/12 of
1% per month)
B-9
<PAGE>
of the Fund's average daily net assets, which fee does not decrease as the
Fund's assets increase. The fee is at a higher rate than the management fees
paid to SBAM by the other common stock investment companies it manages.
Management fees paid by the Fund to SBAM for the fiscal years ended August 31,
1995, 1994 and 1993 amounted to $1,168,976, $1,161,529 and $1,101,259,
respectively.
The Management Contract also provides that if, in any fiscal year, the
total expenses of the Fund, excluding taxes, interest, brokerage and
extraordinary expenses, but including the management fee, exceed the applicable
expense limitations imposed by the securities regulations of any state in which
shares of the Fund's Capital Stock are, with SBAM's consent, registered or
qualified for sale to the public, SBAM will pay or reimburse the Fund for such
excess up to the amount of its management fee that year. Although there is no
certainty that these limitations will be in effect in the future, the most
restrictive of these limitations on an annual basis is currently 2.5% of the
first $30 million of average daily net assets, 2% of the next $70 million of
average daily net assets and 1.5% of average daily net assets in excess of $100
million.
The Management Contract provides that it will continue automatically for
periods of one year provided that such continuance is specifically approved
annually (a) by the vote of a majority of the Fund's outstanding voting
securities or by the Fund's Board of Directors and (b) by the vote of a majority
of the Fund's directors who are not parties to the Management Contract or
"interested persons" of any such party. The Management Contract may be
terminated on 30 days' written notice by either party and will terminate
automatically if assigned.
Investment decisions for the Fund are made independently from those of
other funds or accounts managed by SBAM. Such other funds or accounts may also
invest in the same securities as the Fund. If those funds or accounts are
prepared to invest in, or desire to dispose of, the same security at the same
time as the Fund, however, transactions in such securities will be made insofar
as feasible, for the respective funds and accounts in a manner deemed equitable
to all. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or received
by the Fund. In addition, because of different investment objectives, a
particular security may be purchased for one or more funds or accounts when one
or more funds or accounts are selling the same security.
Rule 17j-1 under the 1940 Act requires all registered investment
companies and their investment advisers and principal underwriters to adopt
written codes of ethics and institute procedures designed to prevent "access
persons" (as defined in Rule 17j-1) from engaging in any fraudulent, deceptive
or manipulative trading practices. The Board of Directors for the Fund has
adopted a code of ethics (the "Fund Code") that incorporates personal trading
polices and procedures applicable to access persons of the Fund, which includes
officers, directors and other specified persons who may make, participate in or
otherwise obtain information concerning the purchase or sale of securities by
the Fund. In addition, the Fund Code attaches and incorporates personal trading
policies and procedures applicable to access persons of SBAM, as the investment
adviser to the Fund, which policies serve as SBAM's
B-10
<PAGE>
code of ethics (the "Adviser Code"). The Fund and Adviser Codes have been
designed to address potential conflict of interests that can arise in connection
with the personal trading activities of investment company and investment
advisory personnel.
Pursuant to the Fund and Adviser Codes, access persons are generally
permitted to engage in personal securities transactions, provided that a
transaction does not involve securities that are being purchased or sold, are
being considered for purchase or sale, or are being recommended for purchase or
sale by or for the Fund. In addition, the Adviser Code contains specified
prohibitions and blackout periods for certain categories of securities and
transactions, including a prohibition on short-term trading and purchasing
securities during an initial public offering. The Adviser Code, with certain
exceptions, also requires that access persons obtain preclearance to engage in
personal securities transactions. Finally, the Fund and Adviser Codes require
access persons to report all personal securities transactions periodically.
Distributor
Shares of the Fund are offered on a continuous basis and without a sales
charge through Salomon Brothers as distributor. Salomon Brothers receives no
remuneration for its services as distributor and is not obligated to sell any
specific amount of Fund shares.
Portfolio Transactions
Total brokerage commissions paid by the Fund for the three years ended
August 31 were $34,563 for 1995, $52,382 for 1994 and $47,761 for l993. During
the three years ended August 31, l995, 1994 and 1993, the Fund paid $2,000, $906
and $1,676 respectively, in commissions to Salomon Brothers. Commissions to
Salomon Brothers in the fiscal year ended August 31, 1995 represents less than
6% of the total brokerage commissions paid by the Fund and Salomon Brothers
executed less than 14% of the aggregate dollar amount of transactions involving
commissions during the l995 fiscal year.
The Fund's general policy in selecting brokers and dealers is to obtain
the best results taking into account factors such as the general execution and
operational facilities of the broker or dealer, the type and size of the
transaction involved, the creditworthiness of the broker or dealer, the
stability of the broker or dealer, execution and settlement capabilities, time
required to negotiate and execute the trade, research services and SBAM's
arrangements related thereto (as described below) overall performance, the
dealer's risk in positioning the securities involved, and the broker's
commissions and dealer's spread or mark-up. While SBAM generally seeks the best
price in placing its orders, the Fund may not necessarily be paying the lowest
price available. Notwithstanding the above, in compliance with Section 28(e) of
the Securities Exchange Act of 1934, SBAM may select brokers who charge a
commission in excess of that charged by other brokers, if SBAM determines in
good faith that the commission to be charged is reasonable in relation to the
brokerage and research services provided to SBAM by such brokers. Research
services generally consist of research or statistical reports or oral advice
from brokers and dealers regarding particular companies, industries or general
economic conditions. SBAM may also have arrangements with brokers
B-11
<PAGE>
pursuant to which such brokers provide research services to SBAM in exchange for
a certain volume of brokerage transactions to be executed by such broker. SBAM's
arrangements for the receipt of research services from brokers may create
conflicts of interest. While the payment of higher commissions increases the
Fund's costs, SBAM does not believe that the receipt of such brokerage and
research significantly reduces its expenses as the Fund's investment manager.
Research services furnished to SBAM by brokers who effect securities
transactions for the Fund may be used by SBAM in servicing other investment
companies and accounts which it manages. Similarly, research services furnished
to SBAM by brokers who effect securities transactions for other investment
companies and accounts which SBAM manages may be used by SBAM in servicing the
Fund. Not all of these research services are used by SBAM in managing any
particular account, including the Fund.
Over-the-counter purchases and sales are transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere. The Fund's Board of Directors has
determined that any brokerage transaction for the Fund may be executed through
Salomon Brothers if in such transaction the Fund is charged a commission rate
consistent with those charged by other brokers in comparable transactions with
clients that are comparable with the Fund.
Irving Brilliant, who is an employee of SBAM, and President and
portfolio manager of the Fund, is primarily responsible for the allocation of
brokerage.
Determination of Net Asset Value
The Fund's net asset value per share for the purpose of pricing purchase
and redemption orders is determined at the close of regular trading of the New
York Stock Exchange on each day the Exchange is open for business. The net asset
value per share is computed by dividing the value of the net assets of the Fund
(i.e., the value of the assets less the liabilities) by the total number of Fund
shares outstanding. In calculating net asset value, portfolio securities listed
or traded on national securities exchanges, or reported by the NASDAQ reporting
system, are valued at the last sale price, or, if there have been no sales on
that day, at the mean of the current bid and ask price which represents the
current value of the security. Other over-the-counter securities are valued at
the mean of the current bid and ask price. If no quotations are readily
available (as may be the case for securities of limited marketability), or if
"restricted" securities are being valued, such portfolio securities and other
assets are valued as the Board of Directors in good faith deems appropriate to
reflect the fair value thereof. In computing the net asset value of the Fund's
shares, no adjustment is made for brokerage, taxes and other costs which may be
incurred in connection with the sale of portfolio securities or the investing of
the funds received on such sale.
Performance Data
B-12
<PAGE>
From time to time, the Fund may quote its total return in advertisements
or in reports and other communications to shareholders.
Total Return
The Fund's "average annual total return" figures described and shown in
the Prospectus are computed according to a formula prescribed by the SEC. The
formula can be expressed as follows:
P(1+T) to the power of n = ERV
Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000
investment made at the beginning of the 1, 5, or 10 year
periods at the end of the 1, 5, or 10 year periods (or
fractional portion thereof), assuming reinvestment of all
dividends and distributions.
Federal Income Taxes
The following is a summary of selected federal income tax considerations
that may affect the Fund and its shareholders. This summary is not intended as a
substitute for individual tax advice and investors are urged to consult their
own tax advisers as to the federal, state and local tax consequences to them of
an investment in the Fund.
Taxation of the Fund
The Fund intends to continue to qualify as a regulated investment
company under subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a regulated investment company, the Fund will not be subject to
federal income tax on its net investment income (i.e., its investment company
taxable income, as that term is defined in the Code, determined without regard
to the deduction for dividends paid) and net capital gains (the excess of long-
term capital gains over short-term capital losses), if any, that it distributes
to its shareholders, provided that it distributes all of its investment company
taxable income and net capital gains for the taxable year. All investment
company taxable income and net capital gains distributed by the Fund will be
reinvested automatically in additional shares of the Fund at net asset value,
unless the shareholder elects to receive dividends and distributions in cash.
Qualification as a regulated investment company under Subchapter M of
the Code requires, among other things, that the Fund: (a) derive at least 90% of
its gross income from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of stock or securities,
foreign currencies or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies; (b) derive less than 30% of its gross income
from the sale or
B-13
<PAGE>
other disposition of any of the following held for less than three months:
stock, securities, options, futures, certain forward contracts, or foreign
currency transactions (or any options, futures or forward contracts on foreign
currencies) but only if such currencies are not directly related to the Fund's
principal business of investing in stock or securities; and (c) diversify its
holdings so that, at the end of each fiscal quarter, (i) at least 50% of the
market value of the Fund's assets is represented by cash, cash items, U.S.
Government securities, securities of other regulated investment companies and
other securities with such other securities limited, in respect of any one
issuer, to an amount not greater than 5% of the value of the Fund's assets and
10% of the outstanding voting securities of such issuer, and (ii) not more than
25% of the value of its assets is invested in the securities of any one issuer
(other than U.S. Government securities or the securities of other regulated
investment companies).
Tax Status of the Fund's Investments
Gain or loss on the sale or other disposition of Fund investments will
generally be long-term capital gain or loss if the Fund has held the security
for more than one year. Gain or loss on the sale of a security held for less
than one year will generally be short-term capital gain or loss. If the Fund
acquires a debt security at a discount, any gain upon the sale or redemption of
the security, to the extent it reflects accrued market discount, will in certain
circumstances be taxed as ordinary income, rather than capital gain.
Foreign countries may impose withholding and other taxes on dividends
and interest paid to the Fund with respect to investments in foreign securities.
However, certain foreign countries have entered into tax treaties with the U.S.
to reduce or eliminate such taxes.
Taxation of Shareholders
Dividends of net investment income and will be taxable to shareholders
as ordinary income for federal income tax purposes. Dividends received by
corporate shareholders will only qualify for the dividends received deduction to
the extent the Fund designates the amount distributed as a dividend and the
amount so designated does not exceed the aggregate amount of dividends received
by the Fund from domestic corporations for the taxable year. The dividends
received deduction for corporate shareholders may be further reduced if the
shares with respect to which dividends are received are treated as debt-financed
(generally acquired with borrowed funds) or are deemed to have been held for
less than 46 days. The amount of any dividends eligible for the corporate
dividends received deduction, if any, will be designated by the Fund in a
written notice within 60 days of the close of the Fund's taxable year.
Distributions of net capital gains will be taxable to shareholders at
capital gains rates, whether paid in cash or reinvested in additional shares and
regardless of the length of time the investor has held his or her shares in the
Fund. If a shareholder redeems or exchanges shares of the Fund before he or she
has held them for more than six months, any loss on such redemption or exchange
will be treated as long-term capital loss to the extent of any long-term capital
gain distributions received by the shareholder as designated in a written notice
from the Fund.
B-14
<PAGE>
Shareholder Services
Exchange Privilege. Shareholders may exchange all or part of their Fund
shares for shares in any of the other Salomon Brothers Family of Funds listed in
the Prospectus by contacting First Data Investor Services Group, Inc. ("FDISG"),
a subsidiary of First Data Corporation. American Express retains a 12.2%
interest in FDC. FDISG is located at One American Express Plaza, Providence,
Rhode Island 02903.
The exchange privilege enables shareholders in any of these funds to
acquire shares in a fund with different investment objectives when they believe
that a shift between funds is an appropriate investment decision. This privilege
is available to shareholders residing in any state in which the fund shares
being acquired may legally be sold. Prior to any exchange, the shareholder
should obtain and review a copy of the current prospectus of each fund into
which an exchange is to be made. Such prospectuses may be obtained from SBAM.
Exercise of the exchange privilege is treated as a sale and repurchase
for federal income tax purposes, and, depending on the circumstances, a short or
long-term capital gain or loss may be realized.
Upon receipt of proper instructions and all necessary supporting
documents, shares submitted for exchange are redeemed at the then-current net
asset value and the proceeds immediately invested in shares of the fund being
acquired at a price equal to the then current net asset value of such shares
plus any applicable sales charge.
All accounts involved in an exchange must have the same registration. If
a new account is to be established, the dollar amount to be exchanged must be at
least as much as the minimum initial investment of the fund whose shares are
being purchased. Any new account established by exchange will automatically be
registered in the same way as the account from which shares are exchanged and
will carry the same dividend option.
The exchange privilege may be modified or terminated at any time. The
privilege is not designed for investors trying to catch short-term savings in
market prices by making frequent exchanges. The Fund reserves the right to
impose a limit on the number of exchanges a shareholder may make. Call or write
the Fund for further details.
Automatic Withdrawal Plan. An Automatic Withdrawal Plan ("Withdrawal
Plan") may be opened with shares having a total value of at least $7,500. All
dividends and distributions on the shares held under the Withdrawal Plan are
automatically reinvested at net asset value in full and fractional shares.
Withdrawal payments are made by FDISG, as agent, from the proceeds of the
redemption of such number of shares as may be necessary to make each periodic
payment. As such redemptions involve the use of capital, over a period of time
they may exhaust the share balance of an account held under a Withdrawal Plan.
Use of a Withdrawal Plan cannot assure realization of investment objectives,
including capital growth or protection against loss in declining markets. A
Withdrawal Plan can be terminated at any time by the investor, the Fund or FDISG
upon notice in writing.
B-15
<PAGE>
Self-Employed Retirement Plans. The Fund offers a prototype retirement
plan for self-employed individuals ("SERP"). Under the SERP, self-employed
individuals may contribute out of earned income to purchase shares of the Fund
and/or certain other mutual funds managed by SBAM.
Boston Safe Deposit and Trust Company ("Boston Safe") has agreed to
serve as custodian and furnish the services provided for in the SERP and the
related Custody Agreement. Individuals adopting a SERP will be charged an
application fee as well as certain additional annual fees, which are separate
from those paid by the Fund to Boston Safe for its services as Fund custodian.
For information required for adopting a SERP, including information on
fees, the form of SERP and Custody Agreement is available from the Fund. Because
application of particular tax provisions will vary depending on each
individual's situation, consultation with a financial adviser regarding a SERP
is recommended.
IRAs. A prototype individual retirement account ("IRA"), which has been
approved as to form by the Internal Revenue Service ("IRS"), is available for
all working individuals who receive compensation in the tax year for services
rendered and who have not attained age 70-1/2 before the close of the tax year.
In addition, individuals who have received certain distributions from qualified
plans or other IRAs may be eligible to make rollover contributions to an IRA.
Also, individuals covered by an employer-sponsored simplified employee pension
are eligible to establish an IRA. Finally, divorced or legally separated spouses
may make IRA contributions out of taxable alimony payments. Contributions to an
IRA made available by the Fund may be invested in shares of the Fund and/or
certain other mutual funds managed by SBAM.
Boston Safe has agreed to serve as custodian of the IRA and furnish the
services provided for in the Custodial Agreement. Each IRA will be charged an
application fee as well as certain additional annual fees, which are separate
from those paid to Boston Safe for its services as Fund custodian. In accordance
with IRS regulations, an individual may revoke an IRA within seven calendar days
after it is established.
Information required for adopting an IRA, including information on fees,
the form of Custodial Agreement and related materials, including disclosure
materials, is available from the Fund. Consultation with a financial adviser
regarding an IRA is recommended.
Custodian and Transfer Agent
Boston Safe serves as custodian for the Fund. As the Fund's custodian,
Boston Safe, among other things, maintains a custody account or accounts in the
name of the Fund; receives and delivers all assets for the Fund upon purchase
and upon sale or maturity; collects and receives all income and other payments
and distributions on account of the assets of the Fund; and makes disbursements
on behalf of the Fund. The custodian does not determine the
B-16
<PAGE>
investment policies of the Fund, nor decide which securities the Fund will buy
or sell. Boston Safe's address is One Boston Place, Boston, MA 02108.
FDISG serves as the Fund's transfer agent. As the Fund's transfer agent,
FDISG registers and processes transfers of the Fund's stock, processes purchase
and redemption orders, acts as dividend disbursing agent for the Fund and
maintains records and handles correspondence with respect to shareholder
accounts pursuant to a Transfer Agency Agreement.
Independent Accountants
Price Waterhouse LLP serves as the independent accountants for the Fund.
Price Waterhouse LLP provides audit services, tax return preparation and
assistance and consultation in connection with review of Securities and Exchange
Commission filings. Price Waterhouse LLP's address is 1177 Avenue of the
Americas, New York, New York 10036.
Experts
The financial highlights included in the Prospectus and the financial
statements and financial highlights included in this Statement of Additional
Information have been included in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of that firm as experts in
auditing and accounting.
B-17
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
STATEMENT OF NET ASSETS August 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS -- 90.3% of Net Assets
Value
Shares Cost (Note 1a)
------ ---- ---------
<S> <C> <C> <C>
BANKS -- 12.7%
242,244 Bank of New York.................................... $ 2,721,411 $10,537,614
16,000 Bankers Trust NY.................................... 749,567 1,102,000
23,000 BanPonce............................................ 701,900 853,875
7,200 Boatmen's Bancshares................................ 31,193 266,400
32,000 First Chicago....................................... 640,114 2,028,000
20,000 First Hawaiian...................................... 517,800 557,500
27,000 KeyCorp............................................. 144,868 837,000
5,500 Mercantile Bancorporation........................... 45,630 248,875
10,000 Roosevelt Financial Group........................... 140,043 181,250
----------- -----------
5,692,526 16,612,514
----------- -----------
BASIC INDUSTRY -- 4.8%
6,400 Boise Cascade....................................... 271,584 274,400
10,300 Crown Crafts........................................ 160,668 137,762
18,000 NL Industries....................................... 199,350 281,250
14,977 Newmont Mining...................................... 396,959 651,500
14,000 Rayonier............................................ 404,730 537,250
8,000 Stone Container..................................... 140,480 174,000
48,000 TRC Companies*...................................... 354,734 384,000
45,700 Tecumseh Products, Class A.......................... 1,288,253 2,216,450
34,600 Tecumseh Products, Class B.......................... 1,394,235 1,592,681
----------- -----------
4,610,993 6,249,293
----------- -----------
BIOTECHNOLOGY & DRUGS -- 3.4%
14,000 Genzyme*............................................ 394,906 782,250
34,100 Medeva--ADR......................................... 336,346 549,862
15,000 Merck............................................... 527,189 748,125
17,100 Monsanto............................................ 1,050,826 1,622,363
17,500 Upjohn.............................................. 507,497 741,562
----------- -----------
2,816,764 4,444,162
----------- -----------
CONSTRUCTION -- 1.5%
26,700 Ameron.............................................. 526,254 964,538
31,000 INDRESCO*........................................... 284,013 519,250
34,250 Liberty Homes, Class A.............................. 435,000 312,531
24,750 Liberty Homes, Class B.............................. 325,687 221,203
----------- -----------
1,570,954 2,017,522
----------- -----------
CONSUMER GOODS -- 6.2%
60,000 Alexander & Baldwin................................. 600,854 1,365,000
28,200 American Maize Products, Class A.................... 246,770 1,096,275
4,729 Ames Department Stores, Warrants, Series C*......... 4,729 8,276
21,000 Archer-Daniels-Midland.............................. 316,200 349,125
19,400 El Chico Restaurants*............................... 60,625 240,075
100,000 Philips Electronics N.V............................. 1,281,995 4,500,000
31,500 Waban*.............................................. 332,240 594,562
----------- -----------
2,843,413 8,153,313
----------- -----------
</TABLE>
B-18
<PAGE>
S O L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
STATEMENT OF NET ASSETS August 31, 1995 (continued)
<TABLE>
<CAPTION>
COMMON STOCKS (continued)
VALUE
SHARES COST (NOTE 1A)
- ------ ------------ -----------
<S> <C> <C> <C>
ENERGY- 7.1%
14,000 Gilbert Associates, Class A........................ $ 157,790 $ 185,500
28,000 Murphy Oil......................................... 859,865 1,134,000
67,000 Royal Dutch Petroleum, 5 Guilder................... 1,664,599 7,989,750
----------- ----------
2,682,254 9,309,250
----------- ----------
FINANCE- 11.3%
36,000 Federal Home Loan Mortgage......................... 472,360 2,313,000
5,000 Kemper............................................. 260,300 240,000
34,900 Leucadia National.................................. 192,186 1,858,425
59,000 Loews.............................................. 2,610,514 7,751,125
80,382 New Germany Fund................................... 809,519 1,024,871
48,000 Pioneer Group...................................... 167,500 1,368,000
7,100 Salomon............................................ 120,310 272,462
----------- ----------
4,632,689 14,827,883
----------- ----------
HEALTH CARE - 2.9%
10,400 Abbott Laboratories................................ 248,424 403,000
20,000 Applied Bioscience................................. 126,125 147,500
5,250 Bergen Brunswig, Class A........................... 96,675 109,594
8,000 Charter Medical*................................... 164,980 161,000
40,000 Foundation Health*................................. 918,398 1,385,000
8,095 Horizon/CMS Healthcare*............................ 123,392 177,078
30,000 Humana*............................................ 323,425 547,500
6,000 McKesson........................................... 191,250 261,000
5,000 NovaCare*.......................................... 59,050 41,250
3,000 Paragon Trade Brands*.............................. 105,930 46,500
17,400 Wellpoint Health Networks*......................... 472,644 517,650
----------- ----------
2,830,293 3,797,072
----------- ----------
INSURANCE-LIFE, ACCIDENT & HEALTH - 4.3%
7,500 American International Group....................... 440,675 604,688
12,000 Aon................................................ 293,390 468,000
24,750 Fremont General.................................... 571,662 674,437
3,800 Kansas City Life Insurance......................... 183,825 192,850
6,000 Protective Life.................................... 136,431 171,000
10,000 Provident Life & Accident Insurance, Class A....... 180,500 258,750
41,900 UNUM............................................... 430,685 2,011,200
30,000 USLIFE............................................. 614,841 1,293,750
3,000 Western National................................... 36,180 37,500
----------- ----------
2,888,189 5,712,175
----------- ----------
</TABLE>
B-19
<PAGE>
S A L 0 M 0 N B R 0 T H E R S 0 P P 0 R T U N I T Y F U N D I N C
STATEMENT OF NET ASSETS August 31,1995 (continued)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED)
VALUE
SHARES COST (NOTE 1A)
------ ------------ ------------
<S> <C> <C> <C>
INSURANCE-PROPERTY & CASUALTY - 19.7%
60,000 Allmerica Property & Casualty Companies....... $ 1,075,060 $ 1,447,500
29,000 CNA Financial*................................ 653,411 2,780,375
164,000 Chubb......................................... 2,802,937 14,965,000
40,000 Merchants Group............................... 600,000 705,000
13,000 Old Republic International.................... 299,780 359,125
110,375 Orion Capital................................. 1,613,477 4,635,750
19,500 Trenwick Group................................ 605,563 921,375
------------ ------------
7,650,228 25,814,125
------------ ------------
REAL ESTATE - 2.0%
39,900 Forest City Enterprises, Class A*............. 845,723 1,576,050
17,700 Forest City Enterprises, Class B, Conv.*...... 266,221 690,300
30,000 Kahler Realty................................. 226,000 382,500
------------ ------------
1,337,944 2,648,850
------------ ------------
TECHNOLOGY - 3.1%
40,000 Cray Research*................................ 1,076,029 930,000
15,000 Intel......................................... 137,312 920,625
19,500 International Business Machines............... 1,352,135 2,015,813
10,000 Kollmorgen.................................... 89,350 97,500
5,000 Plantronics*.................................. 139,675 180,000
------------ ------------
2,794,501 4,143,938
------------ ------------
TELECOMMUNICATIONS/MEDIA - 2.5%
32,640 CBS........................................... 1,053,205 2,603,040
6,000 Heritage Media, Class A*...................... 113,859 169,500
10,800 Time Warner................................... 229,378 454,950
------------ ------------
1,396,442 3,227,490
------------ ------------
TRANSPORTATION - 8.8%
39,600 AMR........................................... 1,828,140 2,791,800
48,000 Airborne Freight.............................. 408,018 978,000
132,000 American President Companies.................. 1,467,659 3,877,500
33,000 Canadian Pacific.............................. 528,285 556,875
42,000 General Dynamics.............................. 928,543 2,210,250
9,000 Lockheed Martin............................... 308,520 547,875
10,000 OMI*.......................................... 49,300 77,500
23,000 Overseas Shipholding Group.................... 368,980 480,125
------------ ------------
5,887,445 11,519,925
------------ ------------
TOTAL COMMON STOCKS........................... 49,634,635 118,477,512
============ ============
</TABLE>
B-20
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
STATEMENT OF NET ASSETS August 31,1995 (continued)
CORPORATE SHORT-TERM NOTES -- 9.7%
- ----------------------------------
PRINCIPAL
AMOUNT VALUE
(THOUSANDS) (NOTE 1A)
- ----------- ------------
$ 5,859 Ford Motor Credit, 5.75%, due 9/5/95......... $ 5,859,936
6,864 General Electric, 5.68%, due 9/1/95.......... 6,866,166
------------
TOTAL CORPORATE SHORT-TERM NOTES............. 12,726,102
------------
CASH AND RECEIVABLES - 0.1% .... $185,709
LIABILITIES - (0.1)% ........... (152,620) 33,089
-------- ------------
NET ASSETS -- equivalent to $35.75
offering and redemption price
per share on 3,670,611 shares
outstanding................................. $131,236,703
============
NET ASSETS CONSIST OF:
Paid-in capital.............................. $ 57,395,511
Undistributed net investment income.......... 955,908
Undistributed net realized gain.............. 4,042,407
Net unrealized appreciation.................. 68,842,877
------------
NET ASSETS................................... $131,236,703
============
- ----------
*Non-income producing security.
See accompanying notes to financial statements.
B-21
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 1995
INVESTMENT INCOME
INCOME
Dividends (net of foreign withholding tax of $79,175).......... $ 2,258,417
Interest....................................................... 771,949
------------
3,030,366
EXPENSES
Management fee....................................... $1,168,976
Audit and tax return preparation fees................ 54,000
Shareholder services................................. 45,300
Custodian............................................ 36,475
Legal................................................ 28,225
Registration and filing fees......................... 20,900
Printing............................................. 18,700
Directors' fees and expenses......................... 7,550
Other................................................ 15,050 1,395,176
---------- -------------
Net investment income........................................... 1,635,190
-------------
NET REALIZED GAIN ON INVESTMENTS................................ 5,072,992
-------------
NET UNREALIZED APPRECIATION OF INVESTMENTS
Beginning of year.................................... 52,725,903
End of year.......................................... 68,842,877
----------
Increase in net unrealized appreciation......................... 16,116,974
------------
Net realized gain and increase in net unrealized appreciation... 21,189,966
------------
Net increase in net assets resulting from operations............ $ 22,825,156
============
See accompanying notes to financial statements.
B-22
<PAGE>
S A L 0 M 0 N B R 0 T H E R S 0 P P 0 R T U N I T Y F U N D I N C
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
AUGUST 31, AUGUST 31,
1995 1994
-------------- ------------
<S> <C> <C>
OPERATIONS
Net INVESTMENT INCOME............................................ $ 1,635,190 $ 1,502,560
Net realized gain on investments................................. 5,072,992 5,916,956
Change in net unrealized appreciation............................ 16,116,974 (70,719)
------------- ------------
Net increase in net assets resulting from operations............. 22,825,156 7,348,797
------------- ------------
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income............................................ (1,345,523) (2,282,349)
Net realized gain on investments................................. (5,382,092) (6,062,489)
------------- ------------
(6,727,615) (8,344,838)
------------- ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of 669,713 and 1,118,919 shares,
respectively.................................................... 21,215,202 33,983,911
Net asset value of 203,063 and 247,130 shares, respectively,
issued in reinvestment of net investment income and net
realized gain distributions..................................... 5,720,292 7,327,415
Payment for redemption of 975,251 and 1,246,710 shares,
respectively................................................... (30,551,387) (38,166,952)
------------- ------------
Change in net assets resulting from capital share transactions,
representing net decrease of 102,475 and net increase of
119,339 shares, respectively................................... (3,615,893) 3,144,374
------------- ------------
Total increase in net assets..................................... 12,481,648 2,148,333
NET ASSETS
Beginning of year............................................... 118,755,055 116,606,722
------------- ------------
End of year (includes undistributed net investment income of
$955,908 and $666,241, respectively)........................... $ 131,236,703 $118,755,055
============= ============
</TABLE>
See accompanying notes to financial statements.
B-23
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered as a non-diversified, open-end investment company under
the Investment Company Act of 1940, as amended. Following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles.
(a) SECURITIES VALUATION. Portfolio securities listed or traded on
national securities exchanges, or reported on the NASDAQ national market
system, are valued at the last sale price, or if there have been no sales on
that day, at the mean of the current bid and ask price which represents the
current value of the security. Over-the-counter securities are valued at the
mean of the current bid and ask price. If no quotations are readily
available (as may be the case for securities of limited marketability), or
if "restricted" securities are being valued, such portfolio securities and
other assets are valued at a fair value determined pursuant to procedures
established by the Board of Directors. Corporate short-term notes with
maturities of 60 days or less at date of purchase are valued at cost plus
interest earned, which approximates market value.
(b) FEDERAL INCOME TAXES. The Fund has complied and intends to continue
to comply with the requirements of the Internal Revenue Code applicable to
regulated investment companies including the distribution requirements of
the Tax Reform Act of 1986, and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax or excise tax provision
is required.
(c) OTHER. Securities transactions are recorded as of the trade date.
Dividend income and dividends payable are recorded on the ex-dividend date.
Noncash dividend income is recorded based on market or fair value of
property received. Gains or losses on sales of securities are calculated for
financial accounting and Federal income tax purposes on the identified cost
basis. Interest is recognized as interest income when earned.
2. CAPITAL STOCK
At August 31, 1995, there were 15,000,000 shares of authorized capital
stock, $.01 par value. The par value of capital stock outstanding at that date
amounted to $36,706. Payable for Fund shares redeemed at August 31, 1995
amounted to $18,013.
B-24
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT FEE AND OTHER TRANSACTIONS
The Fund retains Salomon Brothers Asset Management Inc ("SBAM"), an indirect
wholly-owned subsidiary of Salomon Inc ("Salomon"), to act as investment manager
of the Fund subject to supervision by the Board of Directors of the Fund. SBAM
furnishes the Fund with office space and pays the compensation of its officers.
The management fee for these services is payable monthly at an annual rate of 1%
of average daily net assets. The management fee payable at August 31, 1995 was
$107,431.
If in any fiscal year the total expenses of the Fund, excluding taxes,
interest, brokerage and extraordinary expenses, but including the management
fee, exceed the most stringent expense limitation imposed by state securities
regulations applicable to the Fund, SBAM will pay or reimburse the Fund for the
excess. Currently, this limitation on an annual basis is 2.5% of the first $30
million of average daily net assets, 2.0% of the next $70 million of average
daily net assets and 1.5% of average daily net assets in excess of $100 million.
For the year ended August 31, 1995, there was no such reimbursement.
Brokerage commissions of $2,000 were paid to Salomon Brothers Inc, the
Fund's distributor and an indirect wholly-owned subsidiary of Salomon, for
transactions executed on behalf of the Fund for the year ended August 31, 1995.
At August 31, 1995, the Fund held 7,100 shares of Salomon, representing less
than one percent of the outstanding shares. During the year ended August 31,
1995, the Fund received dividend income of $4,544 from Salomon.
4. PORTFOLIO ACTIVITY
The cost of securities purchased and proceeds from securities sold
(excluding corporate short-term notes) during the year ended August 31, 1995
aggregated $8,367,591 and $18,109,807, respectively.
Cost of securities held (excluding corporate short-term notes) on August 31,
1995 for Federal income tax purposes was $49,968,272. As of August 31, 1995,
gross unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, amounted to $69,166,547 and $657,307, respectively, resulting in
net unrealized appreciation of $68,509,240.
B-25
<PAGE>
S A L 0 M 0 N B R 0 T H E R S 0 P P 0 R T U N I T Y F U N D I N C
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected data per share of capital stock outstanding throughout each year:
YEAR ENDED AUGUST 31,
-------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990+ 1989 1988 1987 1986
------- ------ ------ ------ ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value
beginning
of year................ $31.47 $31.91 $27.64 $25.16 $ 21.06 $28.37 $23.39 $29.53 $27.87 $23.73
------ ------ ------ ------ ------- ------ ------ ------ ------ ------
Net investment
income................. .45 .42 .57 .36 .54 .60 .81* .56 .54 .53
Net gains (or losses)
on securities
(both realized
and unrealized)........ 5.68 1.48 4.85 2.79 4.205 (6.20) 6.29 (3.00) 4.49 5.48
------ ------ ------ ------ ------- ------ ------- ------ ------ ------
Total from
investment
operations............ 6.13 1.90 5.42 3.15 4.745 (5.60) 7.10 (2.44) 5.03 6.01
------ ------ ------ ------ ------- ------ ------- ------ ------ ------
Less dividends and
distributions:
Dividends from
net investment
income................. (.37) (.64) (.345) (.50) (.63) (.82) (.54) (.755) (.585) (.475)
------ ------ ------ ------ ------- ------ ------- ------ ------ ------
Distributions from
net realized gain
on investments......... (1.48) (1.70) (.805) (.17) (.015) (.89) (1.58) (2.945) (2.785) (1.395)
------ ------ ------ ------ ------- ------ ------- ------ ------ ------
Total dividends
and
distributions......... (1.85) (2.34) (1.15) (.67) (.645) (1.71) (2.12) (3.70) (3.37) (1.87)
------ ------ ------ ------ ------- ------ ------- ------ ------ ------
Net asset value,
end of year............ $35.75 $31.47 $31.91 $27.64 $ 25.16 $21.06 $28.37 $ 23.39 $29.53 $27.87
====== ====== ====== ====== ======= ====== ======= ====== ====== ======
Total investment
return based on
net asset value
per share............. +21.1% +6.4% +20.2% +12.9% +23.2% -20.6% +32.9% -6.1% +21.2% +26.9%
Ratios/
Supplemental data:
Net assets
end of year
(thousands)........... $131,237 $118,755 $116,607 $101,679 $102,916 $90,049 $119,250 $92,608 $113,579 $110,151
Ratio of expenses
to average
net assets............. 1.18% 1.22% 1.23% 1.25% 1.30% 1.26% 1.19% 1.20% 1.16% 1.16%
Ratio of net
investment
income to
average net
assets................. 1.39% 1.29% 1.86% 1.28% 2.31% 2.38% 3.20% 2.29% 1.92% 2.44%
Portfolio
turnover rate.......... 8% 13% 10% 11% 11% 13% 15% 29% 25% 28%
</TABLE>
- ----------
* Includes $.27 per share of special dividends received in connection with
corporate actions on certain portfolio companies.
+ Since May 1, 1990, the Fund has been managed by SBAM. Prior thereto, the
Lehman Management Co. division of Shearson Lehman Brothers Inc. served as
the Fund's investment manager.
See accompanying notes to financial statements.
B-26
<PAGE>
S A L O M O N B R O T H E R S O P P O R T U N I T Y F U N D I N C
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
SALOMON BROTHERS OPPORTUNITY FUND INC
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Salomon Brothers Opportunity Fund Inc (the "Fund") at August 31, 1995, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the ten years in the period then ended, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1995 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
New York, New York
October 11, 1995
B-27
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Financial Statements included in Part A:
---------------------------------------
Financial Highlights for the ten years ended August 31, 1995
Financial Statements included in Part B:
---------------------------------------
Statement of Net Assets at August 31, l995
Statement of Operations for the year ended
August 31, l995
Statement of Changes in Net Assets for the
years ended August 31, l995 and August 31, 1994
Notes to Financial Statements
Financial Highlights for the ten years ended August 31, 1995
Report of Independent Accountants
(b) Exhibits:
Exhibit
Number Description
------- -----------
1(a) -- Articles of Incorporation of Registrant (filed as
Exhibit 1 of Registration Statement on Form N-8B-1
(File Nos. 2-63023 and 811-2884) and incorporated
herein by reference).
(b) -- Amendment to Articles of Incorporation of
Registrant (filed as Exhibit 1(a) to Amendment No.
1 to Registration Statement on Form N-8B-1 (File
Nos. 2-63023 and 811-2884) and incorporated herein
by reference).
(c) -- Amendment to Articles of Incorporation of
Registrant (filed as Exhibit 1(b) to Registration
Statement on Form N-8B-1 (File Nos. 2-63023 and
811-2884) and incorporated herein by reference).
(d) -- Amendment to Articles of Incorporation of
C-1
<PAGE>
Registrant (filed as Exhibit l(d) to Post-
Effective Amendment No. ll to the Registration
Statement on Form N-lA (File Nos. 2-63023 and 8ll-
2884) and incorporated herein by reference).
(e) -- Amendment to Articles of Incorporation of
Registrant (filed as Exhibit l(e) to Post-
Effective Amendment No. 13 to the Registration
Statement on Form N-lA (File Nos. 2-63023 and
8ll-2884) and incorporated herein by reference.
2 -- By-Laws of Registrant, as amended, December 16,
1988 (filed as Exhibit (2) to Post-Effective
Amendment No. 10 to the Registration Statement on
Form N-1A (File Nos. 2-63023 and 811-2884) and
incorporated herein by reference).
3 -- None.
4 -- Specimen Stock Certificate (filed as Exhibit 4 to
Amendment No. 1 to Registration Statement on Form
N-8B-1 (File Nos. 2-63023 and 811-2884) and
incorporated herein by reference).
5 -- Management Contract between Registrant and Salomon
Brothers Asset Management Inc (filed as Exhibit 5
to Post-Effective Amendment No. 13 to Registration
Statement on Form N-lA (File Nos. 2-63023 and 8ll-
2884) and incorporated herein by reference).
6(a) -- Distribution Contract between Registrant and
Salomon Brothers Inc dated May 1, 1990 (filed as
Exhibit 6 to Post-Effective Amendment No. 13 to
the Registration Statement on Form N-1A (File Nos.
2-63023 and 811-2884) and incorporated herein by
reference).
(b) -- Dealer Contract between Salomon Brothers Inc and
Shearson Lehman Brothers Inc. (filed as Exhibit
6(b) to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A (File Nos.
2-63023 and 811-2884) and incorporated herein by
reference).
7 -- None.
8 -- Custodian Agreement between Registrant and Boston
Safe Deposit and Trust Company, dated May 1, 1990
(filed as Exhibit 8 to Post-Effective Amendment
No. 16 to the Registration Statement on Form N-1A
(File Nos. 2-63023 and 8111-2884) and incorporated
herein by reference).
C-2
<PAGE>
9(a) -- Transfer Agency Agreement between Registrant and
Boston Safe Deposit and Trust Company, dated May
3, 1985 (filed as Exhibit 9 to Post-Effective
Amendment No. 7 to the Registration Statement on
Form N-1A (File Nos. 2-63023 and 811-2884) and
incorporated herein by reference).
10 -- Opinion of Counsel as to the Legality of
Securities Being Registered is filed herein.
11 -- Consent of Price Waterhouse LLP, independent
accountants is filed herein.
12 -- None.
13(a) -- Subscription Agreement between Registrant and
Irving Brilliant (filed as Exhibit 13(a) to Post-
Effective Amendment No. 6 to the Registration
Statement on Form N-1A (File Nos. 2-63023 and
811-2884) and incorporated herein by reference).
(b) -- Subscription Agreement between Registrant and
William H. David, dated February 8, 1979 (filed as
Exhibit 13(b) to Post-Effective Amendment No. 6 to
the Registration Statement on Form N-1A (File Nos.
2063023 and 811-2884) and incorporated herein by
reference).
14(a) -- Prototype Profit Sharing and Money Purchase
Pension Plan for Self-Employed Individuals (filed
as Exhibit 14(a) to Post-Effective Amendment No. 7
to the Registration Statement on Form N-1A (File
Nos. 2-63023 and 811-2884) and incorporated herein
by reference).
(b) -- Prototype Individual Retirement Account Plan
(filed as Exhibit 14(b) to Post-Effective
Amendment No. 7 to the Registration Statement on
Form N-1A (File Nos. 2-63023 and 811-2884) and
incorporated herein by reference).
15 -- None.
16(a) -- Performance Data (filed as Exhibit 16 to Post-
Effective Amendment No. 10 to Registration
Statement on Form N-1A [File Nos. 2-63023 and
811-2884] and incorporated by reference herein.)
(b) -- Powers of Attorney is filed herein.
C-3
<PAGE>
17 -- Financial Data Schedule is filed herein.
Item 25. Persons Controlled by or under Common Control
with Registrant.
---------------------------------------------
None.
Item 26. Number of Holders of Securities.
-------------------------------
2,183 holders of record at December 20, l995.
Item 27. Indemnification.
---------------
Reference is made to Article Eighth of Registrant's Articles of
Incorporation, Article V of Registrant's By-Laws and paragraph 4 of the
Distribution Agreement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant understands that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The Registrant is named on a Lexington Insurance Company Mutual Fund
Professional Liability Insurance Policy which covers all present and future
directors and officers of Registrant against loss arising from any civil claim
or claims by reason of any actual or alleged error, misstatement, misleading
statement, negligent act or omission, or neglect or breach of duty committed
while acting as directors or officers of the Registrant. The policy covers 100%
of the excess of $250,000 up to $5 million of any losses including legal and
other expenses in connection with any claim.
Item 28. Business and Other Connections
of Investment Adviser.
------------------------------
Investment Adviser -- Salomon Brothers Asset Management Inc
- ------------------
Salomon Brothers Asset Management Inc ("SBAM"), a wholly owned subsidiary of
Salomon Inc, is an investment adviser registered under the Investment Advisers
Act of 1940 (the "Advisers Act")
C-4
<PAGE>
and renders investment advice to a wide variety of individual, institutional and
investment company clients.
The list required by this Item 28 of officers and directors of SBAM, together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by such officers and directors during the past
two years, is incorporated by reference to Schedules A and D of FORM ADV filed
by SBAM pursuant to the Advisers Act (SEC File No. 801-32046).
Past information as to any other business vocation or employment of a
substantial nature engaged in by such officers and directors can be located in
Schedules A and D of past filings of FORM ADV (SEC File No. was 80l-l0642).
Item 29. Principal Underwriter
---------------------
(a) Salomon Brothers Inc ("Salomon Brothers") currently acts as distributor for,
in addition to the Fund, Salomon Brothers Capital Fund Inc, Salomon Brothers
Investors Fund Inc and Salomon Brothers Series Funds Inc
(b) The information required by this Item 29 with respect to each director,
officer or partner of Salomon Brothers is incorporated by reference to Schedule
A of Form BD filed by Salomon Brothers pursuant to the Securities Exchange Act
of l934 (SEC File No. 3-26920).
(c) Not Applicable.
Item 30. Location of Accounts and Records.
--------------------------------
(1) Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
(2) Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
(3) First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(records relating to its functions as administrator)
(4) First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(records relating to its functions as transfer agent)
(5) Salomon Brothers Inc.
7 World Trade Center
New York, New York 10048
C-5
<PAGE>
Item 31. Management Services.
-------------------
Not applicable.
Item 32. Undertakings.
------------
(a) Not applicable
(b) Not applicable
(c) The Registrant hereby undertakes to furnish each person
to whom a Prospectus is delivered with a copy of the
Registrant's latest Annual Report to shareholders upon
request and without charge.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment No. 19 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, State of New York, on this 29th day of December, 1995.
SALOMON BROTHERS OPPORTUNITY FUND INC
(Registrant)
By /s/ Irving Brilliant
--------------------
Irving Brilliant, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment to this Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Irving Brilliant President and 12/29/95
- --------------------------- Director
Irving Brilliant (Principal Executive
Officer)
/s/ Alan M.Mandel Treasurer 12/29/95
- ---------------------------
Alan M. Mandel
/s/ Benito Gaguine Director 12/29/95
- ---------------------------
Benito Gaguine
/s/ Rosalind A. Kochman Director 12/29/95
- ---------------------------
Rosalind A. Kochman
/s/ Irving Sonnenschein Director 12/29/95
- ---------------------------
Irving Sonnenschein
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page
- -------------- ----------- ----
10 Opinion of Counsel as to the Legality of Securities
Being Registered.
11 Consent of Price Waterhouse LLP, Independent
Accountants.
16(b) Powers of Attorney
17 Financial Data Schedule
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> SALOMON BROTHERS OPPORTUNITY FUND INC
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 49634635
<INVESTMENTS-AT-VALUE> 118477512
<RECEIVABLES> 185708
<ASSETS-OTHER> 12726103
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 131389323
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (152620)
<TOTAL-LIABILITIES> (152620)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5739551
<SHARES-COMMON-STOCK> 3670611
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 955908
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4042407
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 688842877
<NET-ASSETS> 131236703
<DIVIDEND-INCOME> 2258417
<INTEREST-INCOME> 771949
<OTHER-INCOME> 0
<EXPENSES-NET> 1395176
<NET-INVESTMENT-INCOME> 1635190
<REALIZED-GAINS-CURRENT> 5072992
<APPREC-INCREASE-CURRENT> 16116974
<NET-CHANGE-FROM-OPS> 22825156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1345523
<DISTRIBUTIONS-OF-GAINS> 5382022
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 669713
<NUMBER-OF-SHARES-REDEEMED> 975251
<SHARES-REINVESTED> 203063
<NET-CHANGE-IN-ASSETS> 12481648
<ACCUMULATED-NII-PRIOR> 666241
<ACCUMULATED-GAINS-PRIOR> 4351507
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1168976
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1395176
<AVERAGE-NET-ASSETS> 117754641
<PER-SHARE-NAV-BEGIN> 31.47
<PER-SHARE-NII> .45
<PER-SHARE-GAIN-APPREC> 5.68
<PER-SHARE-DIVIDEND> (.37)
<PER-SHARE-DISTRIBUTIONS> (1.48)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 35.75
<EXPENSE-RATIO> 1.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EXHIBIT 99.10
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
Baltimore, Maryland 21201-3018
410-539-2530 WASHINGTON
FAX: 410-539-0489 NEW YORK
PHILADELPHIA
EASTON
LONDON
December 26, 1995
Salomon Brothers Opportunity Fund Inc
Seven World Trade Center
New York, New York 10048
Registration Statement on Form N-1A
(Registration Nos. 2-63023 and 811-2884)
Ladies and Gentlemen:
We understand that Salomon Brothers Opportunity Fund Inc, a Maryland
corporation (the "Fund"), intends to register 313,198 shares of its capital
stock, par value $.01 per share (the "Shares"), pursuant to Post-Effective
Amendment No. 19 to the Fund's Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), and in reliance upon Rule 24e-2
under the Investment Company Act of 1940, as amended (the "1940 Act").
In response to the Fund's request, we have examined the Fund's Charter and
By-Laws, the Prospectus and Statement of Additional Information included in its
Registration Statement on Form N-1A, as amended (the "Prospectus"), and such
statutes, regulations, corporate records, and documents that we deemed necessary
or advisable for purposes of this opinion. We have also examined a certificate
of the Secretary of the Fund dated December 26, 1995 (the "Certificate") as to
certain factual matters. In rendering our opinion, we are relying on the
Certificate and have made no independent investigation or inquiries as to the
matters set forth therein.
We have assumed, without independent verification, the genuineness of
signatures, the authenticity of all documents submitted to us as originals, and
the conformity with originals of all documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that when sold and paid
for in accordance with the terms of the Prospectus, the Shares will be validly
issued, fully paid, and non-assessable under the laws of the State of Maryland.
<PAGE>
Piper & Marbury
L.L.P.
Salomon Brothers Opportunity Fund Inc
December 26, 1995
Page 2
This opinion is limited to the law of the State of Maryland governing the
authorization and issuance of capital stock. We express no opinion as to the
securities or "Blue Sky" laws of the State of Maryland or as to Federal
securities laws.
We consent to the filing of this opinion as part of Post-Effective
Amendment No. 19 to the Fund's Registration Statement. This opinion may not be
relied upon by any other person or for any other purpose without our written
consent.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE>
EXHIBIT 99.11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 19 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
October 11, 1995, relating to the financial statements and financial highlights
of Salomon Brothers Opportunity Fund Inc, which appears in such Statement of
Additional Information, and to the incorporation by reference of our report into
the Prospectus which constitutes part of this Registration Statement. We also
consent to the reference to us under the heading "Independent Accountants" and
"Experts" in such Statement of Additional Information and to the reference to us
under the heading "Financial Highlights" in such Prospectus.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 22, 1995
<PAGE>
EXHIBIT 99.16(b)
POWER OF ATTORNEY
-----------------
We, the undersigned, hereby severally constitute and appoint Lawrence H.
Kaplan, Tana E. Tselepis and Alan M. Mandel, as true and lawful attorneys, with
full power to them, to sign for us, and in our hands and in the capacities
indicated below, any and all Registration Statements on Form N-1A of Salomon
Brothers Opportunity Fund Inc and any and all amendments thereto, and to file
the same, with all exhibits thereto, with the Securities and Exchange
Commission, granting unto said attorneys, full authority and power to do and
perform each and every act and thing requisite or necessary to be done in the
premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys may lawfully do
or cause to be done by virtue thereof.
WITNESS our hands as of the dates set forth below:
Signature: Title: Date:
- --------- ----- ----
/s/ Irving Brilliant President and December 28, 1995
- -------------------- Director
Irving Brilliant
/s/ Benito Gaguine Director December 28, 1995
- ------------------
Benito Gaguine
/s/ Rosalind A. Kochman Director December 28, 1995
- -----------------------
Rosalind A. Kochman
/s/ Irving Sonnenschein Director December 28, 1995
- -----------------------
Irving Sonnenschein
