SALOMON BROTHERS OPPORTUNITY FUND INC, 485BPOS, 1998-11-23

SALOMON BROTHERS OPPORTUNITY FUND INC
485BPOS, 1998-11-23

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 23, 1998

REGISTRATION NO. 2-63023
811-2884
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM N-1A

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 22 [x]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 22 [x]
</TABLE>

------------------------

SALOMON BROTHERS OPPORTUNITY FUND INC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

------------------------

7 WORLD TRADE CENTER,
NEW YORK, NEW YORK, 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 725-6666

------------------------

IRVING G. BRILLIANT
SALOMON BROTHERS ASSET MANAGEMENT INC
7 WORLD TRADE CENTER
NEW YORK, NEW YORK, 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)

------------------------

COPY TO:
SARAH E. COGAN, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK, 10017

------------------------

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
this Post-Effective Amendment becomes effective.

It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[x] on December 15, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

________________________________________________________________________________

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

<TABLE>
<CAPTION>
PART A PROSPECTUS CAPTION
- -------- ---------------------------------------------------------

<S> <C> <C>
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;
Stockholder Services
Item 8. Redemption or Repurchase.................. Redemption of Shares; Determination of Net Asset Value
Item 9. Pending Legal Proceedings................. Not Applicable
</TABLE>

<TABLE>
<CAPTION>
PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
- -------- ---------------------------------------------------------

<S> <C> <C>
Item 10. Cover Page................................ Cover Page
Item 11. Table of Contents......................... Table of Contents
Item 12. General Information and History........... Management; Summary (Part A)
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 (Part A)
Item 16. Investment Advisory and Other Services.... Management; Stockholder Services; Custodian and Transfer
Agent; Independent Accountants
Item 17. Brokerage Allocation and Other
Practices............................... Portfolio Transactions
Item 18. Capital Stock and Other Securities........ Capital Stock (Part A)
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; Stockholder
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
</TABLE>

SALOMON BROTHERS
OPPORTUNITY FUND INC

PROSPECTUS
DECEMBER 15, 1998

[Logo]

SALOMON BROTHERS OPPORTUNITY FUND INC
A No-Load Mutual Fund
7 World Trade Center, New York, New York 10048
(800) SALOMON
(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 will achieve its investment objectives.

This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund and should be read and retained for
future reference. A Statement of Additional Information dated December 15, 1998,
containing additional information about the Fund (the 'Statement of Additional
Information'), has been filed with the Securities and Exchange Commission (the
'SEC') and is incorporated herein by reference. It is available without charge
and can be obtained by writing the Fund at the address, or by calling the toll-
free telephone number, listed above. THE SEC MAINTAINS A WEBSITE AT
HTTP://WWW.SEC.GOV THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION,
MATERIAL INCORPORATED BY REFERENCE AND OTHER INFORMATION REGARDING THE FUND.

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 9
Management 10
</TABLE>

<TABLE>
<S> <C>
Determination of Net Asset Value 11
Purchase of Shares 11
Redemption of Shares 13
Dividends, Distributions and Income
Taxes 15
Stockholder Services 17
Account Services 17
Capital Stock 17
</TABLE>

SALOMON BROTHERS ASSET MANAGEMENT INC -- INVESTMENT MANAGER
CFBDS, INC. -- DISTRIBUTOR
DECEMBER 15, 1998

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.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. MUTUAL FUND SHARES
INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE
NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO TIME.

SUMMARY

THE FUND

Salomon Brothers Opportunity Fund Inc (the 'Fund'), an open-end, no-load,
non-diversified investment company, was incorporated in Maryland on October 13,
1978.

INVESTMENT OBJECTIVES

The Fund's primary objective is to achieve above average long-term capital
appreciation. Current income is a secondary objective. There can be no assurance
that the Fund will achieve its investment objectives.

INVESTMENT MANAGER

Salomon Brothers Asset Management Inc ('SBAM') is the Fund's investment manager.
SBAM also serves as investment adviser to other investment companies and
numerous 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 through First
Data Investor Services Group, Inc., a subsidiary of First Data Corporation
('FDISG'), the Fund's transfer agent, or from a selected dealer. The minimum
initial investment is $1,000 and subsequent investments require a minimum of
$100. However, for Individual Retirement Accounts and Self-Employed Retirement
Plans (formerly, Keogh Plans), the minimum initial investment is $250. In
addition, an account can be established with a minimum of $50 if such account
will be receiving regular periodic investments through the Automatic Investment
Plan. See 'Purchase of Shares' and 'Stockholder Services.'

SALE OF SHARES

The Fund redeems shares at net asset value. The Fund does not charge a
redemption fee. See 'Redemption of Shares.'

DIVIDENDS

The Fund intends to distribute annually substantially all of its net investment
income and net capital gain, which will be reinvested in additional shares of
the Fund unless a stockholder requests otherwise. See 'Dividends, Distributions
and Income Taxes.'

RISK FACTORS

Prospective investors should consider certain risks associated with an
investment in the Fund. The Fund may employ the speculative investment
techniques of leveraging and investing 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
Fund's classification as a non-diversified investment company under the
Investment Company Act of 1940, as amended (the '1940 Act') and the Fund's
ability to invest in foreign securities. See 'Investment Policies.' The Fund
should not be viewed as a complete investment program.

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 stockholder of the Fund, based upon the Fund's actual operating
expenses for its most recent fiscal year, calculated as a percentage of average
daily net assets. These are the only fund related expenses that an investor
bears. Under certain circumstances, certain broker/dealers may impose additional
transaction fees on the purchase and/or sale of Fund shares. See 'Purchase of
Shares.'

Annual Fund Operating Expenses
(as a % of average daily net assets)
Management fees 1.00%
Other expenses .12%
Total Fund Operating Expenses 1.12%

'Management fees' in the above table represents investment advisory fees paid by
the Fund to SBAM. Pursuant to a Sub-Administration Agreement, SBAM remits a
portion of its management fee (equal to .06% of the Fund's average daily net
assets) to Investors Bank & Trust Company ('Investors Bank') for certain
administrative services which Investors Bank provides to the Fund. See
'Management.'

'Other expenses' in the above table includes fees for stockholder services,
custodial fees, legal and accounting fees, printing costs and registration fees.

The following example illustrates the projected dollar amount of total
cumulative expenses that would be incurred over various periods with respect 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 preceding table
and are also based upon the following assumptions:

EXAMPLE: A stockholder 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 $11
After 3 years $36
After 5 years $62
After 10 years $136

THIS EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE OF PAST OR FUTURE
EXPENSES 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%.

FINANCIAL HIGHLIGHTS

The following information on selected per share data and ratios for each of the
ten years in the period ended August 31, 1998, has been audited by
PricewaterhouseCoopers LLP, the Fund's independent accountants, whose
unqualified report thereon for the five years ended August 31, 1998, appears in
the Fund's 1998 Annual Report, which is incorporated by reference into the
Statement of Additional Information.

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990'D' 1989
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of year... $50.64 $37.89 $35.75 $31.47 $31.91 $27.64 $25.16 $21.06 $28.37 $23.39
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment
income.............. 0.46 0.43 0.60 0.45 0.42 0.57 0.36 0.54 0.60 0.81*
Net gains (or
losses) on
securities (both
realized and
unrealized)......... (1.95) 14.46 3.38 5.68 1.48 4.85 2.79 4.205 (6.20) 6.29
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from
investment
operations.......... (1.49) 14.89 3.98 6.13 1.90 5.42 3.15 4.745 (5.60) 7.10
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less dividends and
distributions:
Dividends from net
investment income... (0.39) (0.62) (0.48) (0.37) (0.64) (0.345) (0.50) (0.63) (0.82) (0.54)

Distributions from
net realized gain on
investments......... (1.40) (1.52) (1.36) (1.48) (1.70) (0.805) (0.17) (0.015) (0.89) (1.58)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions....... (1.79) (2.14) (1.84) (1.85) (2.34) (1.15) (0.67) (0.645) (1.71) (2.12)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end
of year............. $47.36 $50.64 $37.89 $35.75 $31.47 $31.91 $27.64 $25.16 $21.06 $28.37
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total investment
return based on net
asset value per
share............... - 3.3% +40.5% +11.4% +21.1% +6.4% +20.2% +12.9% +23.2% - 20.6% +32.9%

Ratios/Supplemental
Data: Net assets,
end of year
(thousands)......... $177,269 $188,496 $141,984 $131,237 $118,755 $116,607 $101,679 $102,916 $90,049 $119,250

Ratio of expenses to
average net
assets.............. 1.12% 1.16% 1.18% 1.18% 1.22% 1.23% 1.25% 1.30% 1.26% 1.19%

Ratio of net
investment income to
average net
assets.............. 0.83% 0.95% 1.59% 1.39% 1.29% 1.86% 1.28% 2.31% 2.38% 3.20%

Portfolio turnover
rate................ 3% 4% 5% 8% 13% 10% 11% 11% 13% 15%
</TABLE>

- ------------
* Includes $.27 per share of special dividends received in connection with
corporate actions on certain portfolio companies.
'D' Since May 1, 1990, the Fund has been managed by SBAM. Prior thereto, the
Lehman 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
reflect changes in the price of the Fund's shares and assume that any income
dividends 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
current 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 figures for periods longer than one year, it is
important to note that the Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
Aggregate total return figures may also be used 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 assuming
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
investment, 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 - 3.34%
5 years +14.27%
10 years +13.14%

Furthermore, in reports or other communications to shareholders or in
advertising 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, financial indices such as the Standard & Poor's 500 Index or other
industry or financial publications, including, but not limited to, Barron's,
Business Week, CDA Investment Technologies, Inc., Changing Times, Forbes,
Fortune, Institutional Investor, Investors Daily, Money, Morningstar Mutual
Fund Values, The New York Times, USA Today and The Wall Street Journal. It is
important to note that the total return figures set forth above and in the
table below 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 Annual Report
for the fiscal year ended August 31, 1998 can be obtained by writing the Fund
at the address, or by calling the Fund at the toll-free telephone number,
printed on the front cover.

Investment results for each of the Fund's fiscal years since inception and its
cumulative investment 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'D' REINVESTED RETURN'D'
- ----------------------------------- ------------- -------------- ------------- --------------
<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 - 6.1 +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
1996.......................... +10.0 +11.4 +758.3 +1176.6
1997.......................... +38.5 +40.5 +1088.7 +1693.5
1998.......................... - 4.0 - 3.3 +1040.8 +1633.6
</TABLE>

- ------------
* From commencement of Fund's operations on February 28, 1979.
'D' Assumes the reinvestment of income dividends and capital gain
distributions.

The above performance results do not take into account income taxes payable by
stockholders 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 can be no assurance that the Fund will achieve its investment
objectives.

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 underlying
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 analyzing
potential and existing investments, SBAM considers, among other factors:

1. The effect of changes in management, policies, corporate control or
capitalization 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
future, 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
developments.

In pursuit of its objectives, the Fund may invest in securities of seasoned
issuers or in securities of newly established companies. Portfolio securities
may have extended public markets or may have limited marketability and be
subject, therefore, to wide fluctuations in market value.

The Fund's portfolio manager currently pursues a strategy of retaining
unrealized long-term capital gain and avoiding the tax impact on Fund
stockholders of realizing such gain. This strategy reflects the belief of the
portfolio manager that the Fund's portfolio continues to have long-term growth
potential. As a result of the strategy of retaining unrealized long-term capital
gain, the Fund currently has a substantial amount of net unrealized
appreciation. At August 31, 1998, the amount of such net unrealized appreciation
was $101,396,990, representing approximately 57% of the Fund's net assets. In
light of the reductions in the U.S. long-term capital gain rates, however, the
Fund may take advantage of selling opportunities if, in SBAM's opinion, there
are attractive reinvestment opportunities. In the event the Fund disposes of
securities in its portfolio and recognizes sizeable gains, the Fund will
distribute such gains to stockholders who will be taxed on such amounts. See
'Dividends, Distributions and Income Taxes.'

The Fund intends to invest primarily in common stocks, or securities convertible
into or exchangeable for common stocks, such as convertible preferred stocks or
convertible debentures. When management deems it appropriate however, 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 securities 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 unrated,
securities deemed by SBAM 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 repay 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 substantial discount.

The Fund may invest up to 5% of its net assets in debt securities 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 involve a high degree of risk, see 'Investment Policies'
in the Statement of Additional Information.

The Fund may purchase securities for which there is a limited trading market or
which are subject to restrictions on resale to the public. To the extent that
the Fund's portfolio may include securities of limited marketability, the price
obtainable for such securities could be affected adversely if the Fund were
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 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,' and are therefore not
readily marketable without registration under the Securities Act of 1933, as
amended (the '1933 Act'). See 'Limiting Investment Risks' below. Investments in
securities which are 'restricted' may involve added expenses to the Fund should
the Fund be required to bear registration costs with respect to such securities
and could involve delays in disposing of such securities, which might have an
adverse effect upon the price and timing of sales of such securities and the
ability of the Fund to meet redemption requests. Restricted securities and
securities for which there is a limited trading market may be significantly more
difficult to value due to the unavailability of reliable market quotations for
such securities, and investment in such securities may have an adverse impact on
net asset value. 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.

The Fund is classified under the 1940 Act as a non-diversified investment
company, which means that the Fund is not limited by the 1940 Act with regard to
the percentage of its assets that may be invested in the obligations of any
single issuer, subject to the diversification requirements of subchapter M of
the Internal Revenue Code of 1986, as amended (the 'Code'). To the extent the
Fund invests a relatively high percentage of its assets in the securities of a
smaller number of issuers, the Fund may be more susceptible to any single
economic, political or regulatory occurrence than a more widely diversified fund
and may be subject to greater risk of loss with regard to its portfolio
securities.

The Fund may invest in foreign securities or American Depositary Receipts which
are publicly traded in the United States and may invest up to 5% of its net
assets in foreign securities not publicly traded in the United States. Investors
should recognize that investing in the securities of foreign issuers involves
special considerations which are not typically associ-

ated with investing in the securities of U.S. issuers. Investment in securities
of foreign issuers may involve risks arising from non-U.S. accounting, auditing
and financial reporting standards, from restrictions on foreign investment and
repatriation of capital, from differences between U.S. and foreign securities
markets, including less volume, price volatility in and illiquidity of certain
foreign securities markets, different trading and settlement 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 from banks for either investment or temporary
purposes. Borrowing money for investment purposes is a practice known as
'leveraging.' 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. Notwithstanding the foregoing, the Fund may
not purchase securities on margin, except for short-term credits necessary for
the clearance of transactions. In addition, the Fund may not make short sales of
its securities, except for 'short sales against the box.' See 'Limiting
Investment Risks.'

Borrowing can increase the opportunity for capital appreciation when security
prices rise and increase the risk of loss when prices decline. Interest costs of
borrowing are an expense that otherwise would not be incurred and this could
reduce the net investment income of the Fund. While borrowing creates an
opportunity for increased return, it creates special risks. For example,
borrowing may exaggerate changes in the net asset value of the Fund's shares
and in the return on the Fund's portfolio. Although the principal amount
of any borrowing will be fixed, the Fund's assets may change in value during
the time the borrowing is outstanding. The Fund may be required to liquidate
portfolio securities at a time when it would be disadvantageous to do so in
order to make payments with respect to any borrowing, which could affect the
investment manager's strategy. Furthermore, if the Fund were to engage in
borrowing, an increase in interest rates could reduce the value of the Fund's
shares by increasing the Fund's interest expense.

The foregoing investment policies (other than the policies of the Fund with
respect to the borrowing of money and investing in restricted securities) are
not fundamental policies and may be changed by vote of the Fund's Board of
Directors without the approval of stockholders.

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. If the Fund is
experiencing a delay in recovering the securities lent and, in the meantime, the
value of such securities has decreased, the Fund could experience a loss.

LIMITING INVESTMENT RISKS

The Fund may not:

(1) Invest: (i) more than 25% of the value of its total assets in the securities
of any single issuer (other than the United States Government or its agencies 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' above;

(3) 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);

(4) Underwrite securities, except in instances where the Fund has acquired
portfolio securities which it may not be free to sell publicly without
registration under the 1933 Act ('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 restricted
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;

(5) 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 securities)
of the value of its total assets in portions of issues of bonds, debentures or
other obligations of a type privately placed with financial institutions; and
(ii) this restriction shall not prohibit the Board of Directors of the Fund
from authorizing the lending of portfolio securities to selected members 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;

(6) Purchase more than 3% of the stock of another investment company, or
purchase 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 return
on such investments will be reduced by the operating expenses, including
management fees, of 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

(7) 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
operation 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 1940 Act.

MANAGEMENT

The Fund retains SBAM as its investment manager under an investment management
contract. SBAM is a wholly-owned subsidiary of Salomon Brothers Holding Company
Inc, which is wholly-owned by Salomon Smith Barney Holdings Inc. ('SSBHI') which
is, in turn, wholly-owned by Citigroup Inc. ('Citigroup'). SBAM was incorporated
in 1987 and together with SBAM affiliates in London, Frankfurt, Tokyo and Hong
Kong, provides a broad range of fixed-income and equity investment advisory
services to various individuals and institutional clients located throughout the
world, and serves as investment adviser to various investment companies. As of
October 31, 1998, SBAM and such affiliates managed approximately $29 billion of
assets. Michael S. Hyland serves as President of SBAM. SBAM's business offices
are located at 7 World Trade Center, New York, New York 10048.

Irving G. 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 SBAM and Salomon Smith
Barney Inc., an indirect wholly-owned subsidiary of SSBHI.

Subject to policies 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
Contract') with the Fund. SBAM also furnishes office space and certain
facilities required for the performance by SBAM of certain additional services
provided to the Fund pursuant to the Management Contract, including compliance
with rules and regulations promulgated by the SEC, supervision of Fund
operations and certain administrative and clerical services, and pays the
compensation of the officers, employees and Directors of the Fund who are
affiliated with SBAM.

As compensation for its services, the Fund pays SBAM a monthly fee at the annual
rate of 1% of the Fund's average daily net assets. This fee is higher 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.

CFBDS, Inc., an indirect, wholly-owned subsidairy of Signature Financial Group,
Inc., serves as the Fund's distributor.

Affiliated broker/dealers may from time to time receive fees from the Fund in
connection with the execution of portfolio transactions on behalf of the Fund.

Pursuant to a Sub-Administration Agreement between SBAM and Investors Bank,
Investors Bank performs certain administrative services in connection with the
operation of the Fund. The administrator is not involved in the investment
decisions made with respect to the Fund. The services provided by Investors Bank
under the Sub-Administration Agreement include certain accounting, clerical and
bookkeeping services, Blue Sky reports, corporate secretarial services and
assistance in the preparation and filing of tax returns and reports to
stockholders and the SEC. As compensation for its services and at no additional
cost to the Fund, SBAM pays Investors Bank a fee each month at an annual rate of
.06% of the average daily value of the Fund's net assets.

Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking the most favorable price and
execution 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 affiliated broker/dealers to execute portfolio transactions when
SBAM believes that such broker/dealer's charge for the transaction does not
exceed the usual and customary levels charged by other brokers in connection
with comparable transac-

tions involving similar securities. See 'Portfolio Transactions' in the
Statement of Additional Information.

Year 2000. The investment management services provided to the Fund by SBAM
depend in large part on the smooth functioning of its computer systems. Many
computer software systems in use today cannot recognize the year 2000, but
revert to 1900 or some other date, due to the manner in which the dates were
encoded or calculated. The capability of these systems to recognize the year
2000 could have a negative impact on SBAM's provision of investment advisory
services, including handling of securities trades, pricing and account services.
SBAM has advised the Fund that it has been reviewing all of their computer
systems and actively working on necessary changes to its systems to prepare for
the year 2000 and expects that given the extensive testing which it is
undertaking its systems will be year 2000 compliant before such date. In
addition, SBAM has been advised by certain of the Fund's service providers that
they are in the process of modifying their systems with the same goal. There
can, however, be no assurance that SBAM or any other service provider will be
successful in achieving year 2000 compliance, or that interaction with other
non-complying computer systems will not impair services to the Fund at that
time.

EXPENSES

The Fund's expenses include taxes, interest, fees and salaries of the Directors
and officers who are not directors, officers or employees of the Fund's service
contractors, SEC registration fees, state securities qualification fees, costs
of preparing and printing prospectuses for regulatory purposes and for
distribution to existing stockholders, advisory and administration fees, charges
of the custodian, transfer agent and dividend disbursing agent, certain
insurance premiums, outside auditing and legal expenses, costs of stockholder
reports and stockholder meetings and any extraordinary expenses. The Fund also
pays any brokerage fees and commissions incurred in connection with portfolio
securities transactions.

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
of New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
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, respectively. 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 reliable 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 First Data Investor Services Group,
Inc. ('FDISG'), or from selected dealers which have entered into a sales
agreement with the Fund's distributor. Purchases of shares made through a
selected dealer should be made in accordance with the procedures prescribed by
such selected dealer. The Fund reserves the right to reject any purchase order
in whole or in part.

Shares may be purchased initially by completing a Purchase Application and
mailing it, together with your check payable to Salomon Brothers Funds, to:
Salomon Brothers Opportunity Fund

Inc, c/o First Data Investor Services Group, Inc., P.O. Box 5127, Westborough,
Massachusetts 01581-5127.

The minimum initial investment in Fund shares is $1,000 and subsequent
investments may be made in amounts of $100 or more. However, for IRAs and
Self-Employed Retirement Plans (formerly, Keogh Plans), the minimum initial
investment is $250. In addition, an account can be established with a minimum of
$50 if the account will be receiving regular periodic investments through
programs such as the Automatic Investment Plan. See 'Stockholder Services.'

Subsequent investments may be made at any time through a selected dealer or by
mailing a check to FDISG at the address set forth above, along with the
detachable stub from the Statement of Account (or a letter providing the account
number). Stockholders should be sure to write the Fund's account number on the
check. Initial purchases of Fund shares may not be made by third party 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 stockholder's account. FDISG does not
intend to resubmit such checks for collection.

Subsequent investments may also be made by wiring federal funds to FDISG. Prior
notification by telephone is not required. The investor should instruct the
wiring bank to transmit the specified amount in federal funds to:

Boston Safe Deposit and Trust Company
Boston, Massachusetts
ABA No. 011-001-234
Account #142743
Attn: Salomon Brothers Opportunity Fund
Name of Account:
Account # (As assigned):

Stockholders should note that their bank may charge a fee in connection with
transferring money by bank wire.

To ensure prompt credit to their accounts, investors or their dealers should
call (800) 446-1013 with a reference number for the wire. If wires are received
after 4:00 p.m. New York time, or during a bank holiday, purchases will be
confirmed at the price determined on the next business day.

Orders for the purchase of Fund shares received by selected dealers by the close
of regular trading on the NYSE on any day that the Fund calculates its net asset
value and either transmitted to FDISG, through the facilities of the National
Securities Clearing Corporation ('NSCC') by 7:00 p.m., New York time, on that
day 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' responsibility to ensure that orders are
transmitted so as to be received by FDISG through the facilities of NSCC prior
to the close of its business day. Any loss resulting from a dealer's failure to
submit an order within the prescribed time frame will be borne by that dealer.

Funds transmitted by a wire system other than the Federal Reserve Wire System
generally take one business day to be converted into federal funds. In those
cases in which an investor pays for shares by a check drawn on a member bank of
the Federal Reserve System, federal funds generally will become available on the
business day after the check is deposited. Checks drawn on banks which are not
members of the Federal Reserve System or foreign banks may take substantially
longer to be converted into federal funds.

Although most stockholders elect not to receive stock certificates, certificates
for full shares can be obtained on specific written request at no cost to the
stockholder. No certificates are issued for fractional shares.

Investors who purchase and redeem Fund shares through broker/dealers, banks and
other institutions may be subject to fees imposed by

those entities with respect to the services they provide. Orders placed by an
investor directly with FDISG will not be subject to such fees.

REDEMPTION OF SHARES

Stockholders may redeem all or any part of their account on any business day at
the applicable net asset value determined after the receipt of proper redemption
instructions. The Fund does not charge a redemption fee. The value of shares
upon redemption may be more or less than the investor's cost.

The Fund reserves the right, upon not less than 30 days' written notice, to
redeem the shares in an account which has a value of less than $1,000. However,
any stockholder 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.

Payment of redemption proceeds may be made in securities in accordance with
applicable law. Payment of the redemption price will 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 SEC has by order permitted such suspension; or (c) an
emergency exists, as defined by rules of the SEC, making disposal of portfolio
securities or determination of the value of net assets of the Fund not
reasonably practicable.

The Fund has established different redemption procedures. No redemption requests
will be processed until the Fund has received a completed Purchase Application,
and no redemption of shares purchased by check will be permitted until all
checks in payment for the purchase of the shares to be redeemed have been
collected, which may take up to 15 days or more.

REDEMPTIONS BY MAIL FOR FDISG ACCOUNTS

Shares may be redeemed by mail by submitting the following documents:

(1) Written instructions from registered owner(s), signed exactly as shares are
registered;

(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 letter
or a stock power signed by the registered owner(s) with the signature(s)
guaranteed by an acceptable guarantor. A guarantee of each stockholder's
signature is required for all redemptions, regardless of the amount involved,
when: (i) proceeds are to be paid to someone other than the registered owner(s)
of the shares redeemed; (ii) are to be wired to a bank; or (iii) are to be sent
to an address other than the stockholder's address of record. The Transfer Agent
has adopted standards and procedures pursuant to which signature-guarantees in
proper form generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as from
participants in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ('STAMP') and the Stock Exchanges
Medallion Program. Stockholders with any questions regarding
signature-guarantees should call the telephone numbers listed on the cover; 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 BY MAIL, STOCKHOLDERS SHOULD SUBMIT
REDEMPTION REQUESTS AND ALL RELATED DOCUMENTS DIRECTLY TO: FIRST DATA INVESTOR
SERVICES GROUP, INC., P.O. BOX 5127, WESTBOROUGH, MASSACHUSETTS 01581-5127.

Checks for redemption proceeds will be mailed within seven days of redemption.
Unless other instructions are given in proper form, a check for proceeds of
redemption will be sent to the stockholder's address of record if the
stockholder does not have a brokerage account.

REPURCHASES THROUGH SELECTED DEALERS

In addition, repurchase orders for the repurchase of shares held by investors
will be accepted from dealers with which the Fund's distributor has sales
agreements. Repurchase orders received by the dealer prior to the close of
regular trading on the NYSE on any business day and transmitted prior to the
close of the 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
determined. 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

Stockholders 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 stockholder with the signature(s) guaranteed
in the manner described above under 'Redemptions by Mail' prior to initiating a
telephone redemption.

Stockholders 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 stockholder by
check unless the stockholder has requested redemption by wire in the manner
described below under 'Redemption by Wire.' The check will be made payable to
the registered stockholder(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 stockholder 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. The Fund and/or FDISG may be liable for any losses due to
fraudulent instructions if they do not follow such procedures. When requesting a
redemption by telephone, stockholders should have available the correct account
registration and account number or tax identification number.

REDEMPTION BY WIRE

If redemption by wire has been elected on the Purchase Application, shares may
be redeemed, in the amount of $500 or more, on any business day upon request
made by telephone or letter. No signature guarantee is required on such a
redemption request. To elect this service subsequent to opening an account, call
FDISG for further information.

You may either:

Telephone the redemption request to FDISG by calling (800) 446-1013; or

Mail the request to FDISG at the following address:

Salomon Brothers Opportunity Fund
c/o FDISG
P.O. Box 5127
Westborough, MA 01581-5127

Proceeds of wire redemptions of $500 or more will be wired to the stockholder's
bank indicated

in the Purchase Application or by letter which has been properly guaranteed.
Checks for redemption proceeds of less than $500 will be mailed to the
stockholder's address of record.

Stockholders should note that their bank may charge a fee in connection with
transferring money by bank wire.

REDEMPTIONS IN KIND

If the Board of Directors shall determine that it is in the best interests of
the stockholders of the Fund, the Fund may pay the redemption 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 stockholder, during any period of 90 days, up
to the lesser of $250,000 or 1% of the net assets of the Fund. A stockholder 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, 1998 and intends to
continue to comply in the future with the provisions of subchapter M of the Code
applicable to regulated investment companies so that, among other things, as to
any fiscal year in respect of which it distributes at least 90% of its net
investment income (i.e., its 'investment company taxable income' as such term is
defined in the Code, determined without regard to the deduction for dividends
paid), the Fund will not be subject to federal income tax on its net investment
income and net capital gain (i.e., the excess of the Fund's net realized
long-term capital gain over net realized short-term capital loss) distributed
to stockholders. Each year the Fund will notify stockholders of the tax status
of dividends and distributions from the Fund. Dividends and distributions also
may be subject to state and local taxes. If in any year the Fund fails to
qualify as a regulated investment company, the Fund will be taxable as a
corporation for federal, state and local income tax purposes and will be
subject to certain additional distribution requirements upon requalification.

The Fund intends to distribute to stockholders annually substantially all of its
net investment income and net capital gain. Investors should consider the tax
consequences of buying shares of the Fund prior to the record date of a
distribution because such distribution will generally be taxable even though the
net asset value of shares of the Fund is reduced by the distribution. In
particular, as discussed under 'Investment Policies,' the Fund currently has a
substantial amount of net unrealized appreciation which could result in large
capital gain distributions.

The Fund is subject to a nondeductible 4% excise tax, calculated as a percentage
of certain undistributed amounts of ordinary income and capital gain net income.
To the extent possible, the Fund intends to make sufficient distributions as are
necessary to avoid the imposition of this excise tax.

If a stockholder elects to receive dividends and/or distributions in cash and
the check cannot be delivered to a stockholder due to an invalid address or
otherwise remains uncashed by the stockholder for a period of six months, the
Fund reserves the right to reinvest the dividend and/or distribution in a
stockholder's account at the then-current net asset value and to convert the
stockholder's election to automatic reinvestment in shares of the Fund from
which the distributions were made.

Dividends and capital gain distributions are reinvested automatically in
additional shares of the Fund at the net asset value next determined after the
record date and such shares are automatically credited to a stockholder's
account, unless FDISG or an SBAM representative is informed by notice that a
stockholder wishes to receive such dividends or distributions in cash. The
stockholder may change such distribution option at any time by notification to
FDISG prior to the record date of any such dividend or distribution. See
'Purchase of Shares.' Stockholders 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 net investment income (which term
includes net short-term capital gain) will be taxable to stockholders at
ordinary income rates ('ordinary income dividends'). It is expected that all or
a portion of the Fund's distributions from net investment income will be
eligible for the 70% dividends received deduction available to corporations.
Distributions of net capital gain designated by the Fund as 'capital gain
dividends' will be taxable as long-term capital gain regardless of the length of
time the stockholder has owned his shares. However, such capital gain dividends
will not qualify for the dividends received deduction. In the case of individual
stockholders, long-term capital gain attributable to securities held by the Fund
longer than 12 months is taxed at a maximum rate of 20%. Not later than 60 days
after the close of its taxable year, the Fund will provide its stockholders with
a written notice designating the amounts of any ordinary income dividends or
capital gain dividends. With respect to corporate taxpayers, long-term capital
gain is currently taxed at the same Federal income tax rates as ordinary income
and short-term capital gain.

Generally, stockholders will be taxed on dividends or distributions in the year
of receipt. However, if the Fund declares a dividend or distribution in October,
November or December to stockholders of record on a specified date in such a
month which is paid during the following January, it will be taxable to
stockholders in the year the dividend or distribution is declared.

The redemption of shares of the Fund is a taxable event and may result in a gain
or loss. Gain or loss, if any, recognized on the redemption or other disposition
of Fund shares will be taxed as capital gain or loss if the shares are capital
assets in the stockholder's hands. If a stockholder redeems or otherwise
disposes of shares of a Fund before holding them for more than six months, any
loss on the redemption or other disposition of such shares shall be treated as a
long-term capital loss to the extent of any capital gain dividends received by
the stockholder with respect to such shares. A loss realized on a redemption of
shares may be disallowed if other shares are acquired within a 61-day period
beginning 30 days before and ending 30 days after the date that the shares are
disposed of.

The Fund may be required to withhold federal income tax at a rate of 31%
('backup withholding') from dividends and redemption proceeds paid to
non-corporate stockholders. This tax may be withheld from dividends if: (i) the
payee fails to furnish the Fund with the payee's correct taxpayer identification
number (e.g., an individual's social security number); (ii) the Internal Revenue
Service ('IRS') notifies the Fund that the payee has failed to report properly
certain interest and dividend income to the IRS and to respond to notices to
that effect; or (iii) when required to do so, the payee fails to certify that he
or she is not subject to backup withholding. Redemption proceeds may be subject
to withholding under the circumstances described in (i) above.

Backup withholding is not an additional tax and any amount withheld may be
credited against the stockholder's federal income tax liability.

The foregoing is intended to be general information to stockholders and
potential investors in the Fund and does not constitute tax advice.

Stockholders and potential investors are urged to consult their own tax advisers
regarding federal, state, local and, if applicable, foreign tax consequences of
an investment in the Fund.

STOCKHOLDER SERVICES

The Fund offers the following stockholder services. See the Statement of
Additional Information for further details about these services or call or write
the Fund.

AUTOMATIC INVESTMENT PLAN

An investor who opens an account and wishes to make subsequent, periodic
investments in the Fund by electronic funds transfer from a bank account may
establish an Automatic Investment Plan on the account. The bank at which the
bank account is maintained must be a member of the Automated Clearing House
(ACH). The investor specifies the frequency with which the investments occur
(monthly, every alternate month, quarterly, etc.) with the exception that no
more than one investment will be processed each month. On or about the date
specified by the investor, the Fund will debit the bank account in the specified
amount (minimum of $25 per draft) and the proceeds will be invested at the
applicable offering price determined on the date of the debit.

AUTOMATIC WITHDRAWAL PLAN

With an Automatic Withdrawal Plan, a stockholder may establish a plan for
redemptions to be made automatically monthly or quarterly in amounts not less
than $50 with payments sent directly to the stockholder or to another designated
person. A Withdrawal Plan may be opened with an account having a total 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.

INDIVIDUAL RETIREMENT ACCOUNTS

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
individuals who receive alimony or separate maintenance payments pursuant to a
divorce or separation instrument. Stockholders should consult with a financial
adviser regarding an IRA.

ACCOUNT SERVICES

Stockholders receive annual and semi-annual reports which outline the Fund's
current investments and other financial data. Annual reports include audited
financial statements. Stockholders will receive a Statement of Account following
each share transaction. Stockholders can write or call the Fund at the address
and telephone numbers 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
stockholder is entitled to cast, at all meetings of stockholders, such number of
votes as is equal to the number of full and fractional shares held by such
stockholder. Except as required 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 preference, pre-emptive, conversion
or exchange rights. There are no options or other special rights outstanding
relating to any such shares.

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BOARD OF DIRECTORS

IRVING G. BRILLIANT
President of Salomon Brothers Opportunity Fund Inc

B. ALEXANDER GAGUINE
Fund-raising and electoral campaign consultant

ROSALIND KOCHMAN
Administrator and Counsel,
Brooklyn Eye Surgery Center

IRVING SONNENSCHEIN
Partner in the law firm of Sonnenschein,
Sherman & Deutsch

OFFICERS

IRVING G. BRILLIANT
President

LEWIS E. DAIDONE
Executive Vice President and Treasurer

CHRISTINA T. SYDOR
Secretary

FOR CUSTOMER SERVICE
(800) 446-1013

FOR BROKER/DEALER INQUIRIES
(800) SALOMON
(800) 725-6666
(212) 783-1301
Dial 11 for a representative

DISTRIBUTOR
CFBDS, Inc.
21 Milk Street
Boston, Massachusetts 02106

INVESTMENT MANAGER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048

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
offering may not lawfully be made.

[Logo]

SALOMON BROTHERS OPPORTUNITY FUND INC
A NO-LOAD MUTUAL FUND
7 WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(800) SALOMON
TELEPHONES: (800) 725-6666
OR (212) 783-1301 (NEW YORK STATE)

------------------------

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 will achieve its investment objectives.

This Statement of Additional Information (the 'SAI') is not a prospectus
and is only authorized for distribution when preceded or accompanied by the
Fund's current Prospectus dated December 15, 1998 (the 'Prospectus'). This SAI
supplements and should be read in conjunction with the Prospectus, a copy of
which may be obtained without charge by writing the Fund at the address, or by
calling the telephone numbers, listed above.

December 15, 1998

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Policies.............................. 3
Limiting Investment Risks........................ 5
Management....................................... 6
Portfolio Transactions........................... 8
Determination of Net Asset Value................. 9
Performance Data................................. 10

Federal Income Taxes............................. 10
Stockholder Services............................. 12
Custodian and Transfer Agent..................... 13
Independent Accountants.......................... 13
Counsel.......................................... 13
Financial Statements............................. 13
</TABLE>

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, 1998.

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 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 canceling the Fund's preexisting
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, 1998, and has no present intention to do so. See
'Federal Income Taxes -- Taxation of the Fund' for a discussion of tax
considerations.

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, 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 its net assets in securities of
foreign issuers which are not publicly traded in the United States.

LOW-RATED SECURITIES

The Fund may invest up to 5% of its net assets in debt securities rated
below investment grade by Moody's Investors Service, Inc. ('Moody's') or
Standard & Poor's Ratings Services ('S&P'), with no minimum rating required, and
comparable unrated securities. Such securities are generally referred to as
'high-yield' or 'junk' bonds, and involve a high degree of risk. 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.

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 the Fund's investment manager, 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. The rate of portfolio turnover cannot be predicted with
assurance and may vary from year to year. See the table under 'Financial
Highlights' on page 4 of the Prospectus for the Fund's portfolio turnover rates.

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 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,
as amended, and are readily marketable and may purchase the securities of
companies engaged in businesses which may involve commodities or
commodities futures contracts; or

(3) Write or purchase puts or calls on securities or securities
indices except as described under 'Investment Policies -- Put and Call
Options.'

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. If a
percentage restriction on investment or utilization of assets in a policy or
restriction is adhered to at the time an investment is made, a later change in
percentage ownership of a security or kind of security resulting from changing
market values or a similar type of event will not be considered a violation of
such policy or restriction.

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. With the
exception of Mr. Brilliant, each of the Fund's officers are also officers of
each of the other investment companies for which SBAM, the Fund's investment
manager, acts as investment adviser. 'Interested directors' of the Fund (as
defined in the 1940 Act) are indicated by asterisk.

<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION(S) HELD PRINCIPAL OCCUPATION(S) PAST 5 YEARS
- --------------------------------- ----------------------- --------------------------------------------------

<S> <C> <C>
*Irving Brilliant ............... President and Director Director of Salomon Smith Barney Inc. ('Salomon
Age: 80 Smith Barney') and Director and Portfolio
Manager for SBAM since May 1990.
B. Alexander Gaguine ............ Director Fund-raising and electoral campaign consultant.
834 Walnut Avenue
Santa Cruz, CA 95060
Age: 48
Rosalind A. Kochman ............. Director Administrator and Counsel, Brooklyn Eye Surgery
1301 Avenue J Center.
Brooklyn, New York 11230
Age: 61
Irving Sonnenschein ............. Director Partner in the law firm of Sonnenschein, Sherman &
888 7th Avenue Deutsch.
New York, New York 10016
Age: 78
Lewis E. Daidone ................ Executive Vice Managing Director of Salomon Smith Barney;
388 Greenwich Street President and Treasurer Director and Senior Vice President of Mutual
New York, New York 10013 Management Corp. and Travelers Investment
Age: 40 Adviser, Inc.
Christina T. Sydor .............. Secretary Managing Director of Salomon Smith Barney and
388 Greenwich Street General Counsel of Mutual Management Corp.
New York, New York 10013
Age: 46
</TABLE>

Directors of the Fund not affiliated with SBAM receive from the Fund a $500
fee for each meeting of the Board of Directors attended and are reimbursed for
out-of-pocket expenses relating to attendance at such meetings. The Directors
receive no per annum fee for their services as Directors. 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 such meetings.

As of November 2, 1998, directors and officers of the Fund as a group owned
beneficially approximately 1,042,136 shares or approximately 28% of the Fund's
outstanding shares.

As of November 2, 1998, to the knowledge of management, the following
persons owned of record or beneficially 5% or more of the Fund's outstanding
shares. Irving Brilliant, a director of the Fund and the Fund's President,
directly and as a trustee of trusts for the benefit of his family and trusts for
the benefit of the Gaguine family (see below), was the record and beneficial
owner of approximately 492,070 shares or approximately 13% of the Fund's
outstanding shares. Mr. Brilliant's wife Benice also serves as a trustee of the
foregoing trusts for the benefit of the Brilliant family and in that capacity,
was the record and beneficial owner of approximately 341,607 shares or
approximately 9% of the Fund's outstanding shares. Mrs. Brilliant disclaims
beneficial ownership of shares owned of record directly by Mr. Brilliant. Mrs.
Brilliant shares the same address as Mr. Brilliant. B. Alexander Gaguine, also a
director of the Fund, directly and as a trustee of trusts for the benefit of the
Gaguine family (the 'Gaguine Trusts'), was the record and beneficial owner of
approximately 447,458 shares or approximately 12% of the Fund's outstanding
shares. In addition, Benito Gaguine, father of B. Alexander and a former
director of the Fund, directly and as a trustee of the Gaguine Trusts, was the
record and beneficial owner of approximately 370,779 shares or approximately 10%
of the Fund's outstanding shares. Frances Gaguine, the mother of B. Alexander
and wife of Benito, as a trustee of the

Gaguine Trusts, owned of record and beneficially approximately 367,172 shares or
approximately 10% of the Fund's outstanding shares. Frances Gaguine disclaims
beneficial ownership of shares owned of record directly by Benito Gaguine. The
address for Benito and Frances Gaguine is 8100 Connecticut Avenue, Chevy Chase,
Maryland. John Gaguine, a brother of B. Alexander whose address is 10117 Silver
Street, Juneau, Alaska, directly and as a trustee of the Gaguine Trusts, owned
beneficially approximately 470,337 shares or approximately 13% of the Fund's
outstanding shares. Of such shares, John Gaguine owned of record approximately
467,732 shares or approximately 12% of the Fund's outstanding shares. In
addition, John Gaguine's spouse owned of record and beneficially approximately
891 shares of which he disclaims beneficial ownership. Rosalind Kochman, a
director of the Fund, owned of record and beneficially approximately 79,340
shares or approximately 2% of the Fund's outstanding shares. Of such shares,
Mrs. Kochman owned of record approximately 53,597 shares or approximately 1%
of the Fund's outstanding shares. Dr. Marvin Kochman, husband of Rosalind
Kochman, owned of record and beneficially approximately 288,440 or approximately
8% of the Fund's outstanding shares. Mr. and Mrs. Kochman each disclaim
beneficial ownership of the shares owned of record directly by the other.

The following table provides information concerning the compensation paid
during the fiscal year ended August 31, 1998 to each of the Fund's directors.
The Fund does not provide any pension or retirement benefits to directors. In
addition, the Fund paid no remuneration during the fiscal year ended August 31,
1998 to officers of the Fund, including Mr. Brilliant, who, as employees of
SBAM, are 'interested persons,' as defined in the 1940 Act. None of the
directors serve on the Board of Directors of any other investment company
advised by SBAM or its affiliates.

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF PERSON, POSITION FROM THE FUND
- ----------------------------------------------------------------------------- -------------

<S> <C>
B. Alexander Gaguine $ 2,000
Director
Rosalind A. Kochman $ 3,000
Director
Irving Sonnenschein $ 2,500
Director
</TABLE>

INVESTMENT MANAGER

The Fund retains SBAM as its investment manager. SBAM serves as the
investment manager to various individuals, institutions and other investment
companies. On November 28, 1997, Salomon Inc ('Salomon'), the ultimate parent
company of SBAM merged with and into Smith Barney Holdings Inc., a subsidiary of
Travelers Group Inc. ('Travelers'), to form a new company called Salomon Smith
Barney Holdings Inc. (the 'Transaction'). Upon consummation of the Transaction,
Travelers became the ultimate parent of SBAM, which continues to serve as the
investment adviser to the Fund. On October 8, 1998, Citicorp merged with and
into Travelers to create Citigroup, Inc., a diversified financial services
company engaged in investment services, asset management, consumer finance,
commercial banking and life and property casualty insurance services.

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. 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) 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 charged by SBAM to the other investment companies it manages. Management
fees

paid by the Fund to SBAM for the fiscal years ended August 31, 1998, 1997 and
1996 amounted to $2,080,479, $1,654,512 and $1,406,443, respectively.

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,' as defined in the 1940 Act, of any such party. The
Management Contract may be terminated on 30 days' written notice by the Fund to
SBAM or on 60 days' written notice by SBAM to the Fund. The Management Contract
will terminate automatically in the event of its 'assignment', as defined in the
1940 Act.

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 Fund's Board of Directors 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 code of ethics (the 'Adviser Code').
The Fund Code and the Adviser Code have been designed to address potential
conflicts of interest that can arise in connection with the personal trading
activities of investment company and investment advisory personnel.

Pursuant to the Fund Code and the Adviser Code, 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 Code and the Adviser Code
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 CFBDS as distributor pursuant to a distribution agreement between
CFBDS and the Fund which became effective on September 1, 1998. CFBDS is not
obligated to sell any specific amount of Fund shares.

During the fiscal years ended August 31, 1998, 1997 and 1996, Salomon
Brothers Inc ('SBI') served as the Fund's distributor. SBI received no
compensation for its services as distributor.

PORTFOLIO TRANSACTIONS

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 oral advice from brokers and dealers regarding particular
companies, industries or general economic conditions. SBAM may also have
arrangements with brokers 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. While the payment of higher commissions increases
the Fund's costs, SBAM does not believe that the 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 providing investment advice to
the 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.

Under the 1940 Act, persons affiliated with a Fund are prohibited from
dealing with it as a principal in the purchase and sale of securities unless an
exemptive order allowing such transactions is obtained from the Securities and
Exchange Commission (the 'SEC'). However, a Fund may purchase securities from
underwriting syndicates of which the investment manager or any of its
broker/dealer affiliates is a member under certain conditions, in accordance
with Rule 10f-3 under the 1940 Act.

Affiliated persons of a Fund, or affiliated persons of such persons, may
from time to time be selected to execute portfolio transactions for such Fund.
Subject to the considerations discussed above and in accordance with procedures
adopted by the Board of Directors, in order for such an affiliated person to be
permitted to effect any portfolio transactions for a Fund, the commissions, fees
or other remuneration received by such affiliated person must be reasonable and
fair compared to the commissions, fees or other remuneration received by other
brokers in connection with comparable transactions. This standard would allow
such an affiliated person to receive no more than the remuneration which would
be expected to be received by an unaffiliated broker in a commensurate
arm's-length transaction.

Aggregate brokerage commissions paid by the Fund for the fiscal years ended
August 31, 1998, 1997 and 1996 were $32,170, $27,659 and $31,165, respectively.
During the fiscal years ended August 31, 1998, 1997 and 1996, the Fund paid $0,
$0 and $120, respectively, in commissions to SBI, an affiliated broker-dealer.
Commissions paid to SBI for the fiscal year ended August 31, 1998 represent less
than 1% of the total brokerage commissions paid by the Fund for such fiscal year
and SBI executed less than 2% of the aggregate dollar amount of Fund
transactions.

Irving G. Brilliant, the Fund's President and portfolio manager, is
primarily responsible for the allocation of brokerage transactions.

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 (the 'NYSE') on each day the NYSE 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.

Securities that are primarily traded on foreign exchanges generally are
valued at the preceding closing values of such securities on their respective
exchanges, except that when an occurrence subsequent to the time a value was so
established is likely to have changed such value, then the fair value of those
securities may be determined by consideration of other factors by or under the
direction of the Board of Directors or its delegates. In valuing assets, prices
denominated in foreign countries are converted to U.S. dollar equivalents at the
current exchange rate. Securities may be valued by independent pricing services
which use prices provided by market-makers or estimates of market values
obtained from yield data relating to instruments or securities with similar
characteristics. Short-term obligations with maturities of 60 days or less are
valued at amortized cost, which approximates market value as determined by the
Board of Directors.

PERFORMANCE DATA

From time to time, the Fund may quote its average annual total return or
aggregate total return in advertisements or in reports and other communications
to shareholders.

AVERAGE ANNUAL 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

<TABLE>
<S> <C> <C>
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.
</TABLE>

AGGREGATE TOTAL RETURN

The Fund's 'aggregate total return' figures, as described in the
Prospectus, represent the cumulative change in the value of an investment in
Fund shares for the specified period and are computed by the following formula:

<TABLE>
<S> <C>
ERV-P
AGGREGATE TOTAL RETURN = P
</TABLE>

<TABLE>
<S> <C> <C>
Where: P = a hypothetical initial payment of $10,000.
ERV = Ending Redeemable Value of a hypothetical $10,000 investment made at the beginning of a 1-,
5-, or 10-year period at the end of such period (or fractional portion thereof), assuming
reinvestment of all dividends and distributions.
</TABLE>

FEDERAL INCOME TAXES

The following is a summary of selected federal income tax considerations
that may affect the Fund and its stockholders. This summary is not intended as a
substitute for individual tax advice and investors are urged to consult their
own tax advisors as to the federal, state and local tax consequences to them of
an investment in the Fund.

TAXATION OF THE FUND

The Fund has qualified for the fiscal year ended August 31, 1998 and
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 gain (the excess of net realized long-term
capital gain over net realized short-term capital loss), if any, that it
distributes to its stockholders, provided that it distributes at least 90% of
its net investment income for the taxable year. All net investment income and
net capital gain distributed by the Fund will be reinvested automatically in
additional shares of the Fund at net asset value, unless the stockholder elects
to receive dividends and distributions in cash.

Qualification as a regulated investment company 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; and (b) 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 one year
or less 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 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 STOCKHOLDERS

Dividends of net investment income ('ordinary income dividends') will be
taxable to stockholders as ordinary income for federal income tax purposes.
Ordinary income dividends received by corporate stockholders will be eligible
for the dividends received deduction to the extent of qualifying dividends
received by the Fund from domestic corporations for the taxable year. A dividend
received by the Fund will not be treated as a qualifying dividend (1) if it has
been received with respect to any share of stock that has been held by the Fund
for less than 46 days during the 90 day period beginning on the date which is 45
days before the date on which such share becomes ex-dividend with respect to
such dividend; (2) to the extent that the Fund is under an obligation to make
related payments with respect to positions in substantially similar or related
property; or (3) to the extent the stock on which the dividend is paid is
treated as debt-financed. Moreover, the dividends received deduction may be
disallowed or reduced if the corporate stockholder fails to satisfy the
foregoing requirements with respect to its shares of the Fund. 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 gain that are properly designated by the Fund
('capital gain dividends') will be taxable to stockholders as long-term capital
gain regardless of the length of time the investor has held shares in the Fund.
In the case of individual stockholders, long-term capital gain attributable to
securities held by the Fund longer than 12 months is taxed at a maximum rate of
20%. Not later than 60

days after the close of its taxable year, the Fund will provide its stockholders
with a written notice designating the amounts of any ordinary income dividends
or capital gain dividends. If a stockholder redeems or otherwise disposes of
shares of the Fund before holding them for more than six months, any loss on
such redemption or disposition will be treated as long-term capital loss to the
extent of any capital gain dividends received by the stockholder as designated
in a written notice from the Fund.

STOCKHOLDER SERVICES

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 First Data Investor Services Group, Inc. ('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 written notice.

A new Withdrawal Plan application is required to establish the Withdrawal
Plan in the new Fund. Stockholders should call (800) 446-1013 for more
information.

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 Fund shares and/or
shares of certain other mutual funds managed by SBAM.

Investors Bank & Trust Company ('Investors Bank') 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 Investors Bank 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.

Individual Retirement Accounts. 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 Fund shares and/or in shares of certain other mutual funds
managed by SBAM.

Investors Bank 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 Investors Bank 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

Investors Bank serves as the Fund's custodian. Investors Bank, 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 investment policies of the Fund, nor
decide which securities the Fund will buy or sell. Investors Bank's address is
200 Clarendon Street, Boston, MA 02116.

FDISG serves as the Fund's transfer agent. FDISG registers and processes
transfers of the Fund's stock, processes purchase and redemption orders, acts as
the Fund' dividend disbursing agent and maintains records and handles
correspondence with respect to stockholder accounts pursuant to a Transfer
Agency Agreement. FDISG's address is P.O. Box 5127, Westborough, MA 01581-5127.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP serves as the Fund's independent accountants.
PricewaterhouseCoopers LLP provides audit services, tax return preparation and
assistance and consultation in connection with the review of filings with the
SEC. The financial highlights included in the Prospectus and the financial
statements and financial highlights incorporated by reference in this Statement
of Additional Information have been included and incorporated by reference in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP's address is 1177 Avenue of the Americas, New York,
New York 10036.

COUNSEL

Simpson Thacher & Bartlett (a partnership which includes professional
corporations) serves as Fund counsel and is located at 425 Lexington Avenue, New
York, New York 10017.

Piper & Marbury L.L.P. of Baltimore, Maryland has issued an opinion
regarding the valid issuance of shares being offered for sale pursuant to the
Fund's Prospectus.

FINANCIAL STATEMENTS

The audited financial statements of the Fund for the fiscal year ended
August 31, 1998, contained in the 1998 Annual Report of the Fund, are
incorporated by reference into this SAI. Copies of such Annual Report may be
obtained by calling the telephone number on the first page of this SAI.

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, 1998

Financial Statements incorporated by reference in Part B:

Statement of Net Assets at August 31, 1998

Statement of Operations for the year ended August 31, 1998

Statement of Changes in Net Assets for the years ended August 31,
1997 and August 31, 1998

Notes to Financial Statements

Financial Highlights for the five years ended August 31, 1998

Report of Independent Accountants

(b) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------------------------------------------------

<C> <S>
1(a) -- Articles of Incorporation of Registrant (filed as Exhibit 1 of the 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
the 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 Registrant (filed as Exhibit 1(d) to Post-Effective
Amendment No. 11 to the Registration Statement on Form N-1A (File Nos. 2-63023 and 811-2884) and
incorporated herein by reference).
(e) -- Amendment to Articles of Incorporation of Registrant (filed as Exhibit 1(e) 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).
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 the 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 dated November 28,
1997 (filed as Exhibit 5 to Post-Effective Amendment No. 21 to the Registration Statement on Form
N-1A (File Nos. 2-63023 and 811-2884) and incorporated herein by reference).
6(a) -- Distribution agreement between Registrant and CFBDS, Inc. dated September 1, 1998, is filed herein.
(b) -- Form of Dealer Contract is filed herewith.
7 -- None.
8 -- Custodian Agreement between Registrant and Investors Bank & Trust Company, dated April 23, 1996
(filed as Exhibit 8 to Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A
(File Nos. 2-63023 and 811-2884) and incorporated herein by reference).
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).
</TABLE>

C-1

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------------------------------------------------
<C> <S>
10 -- Opinion and consent of Counsel (filed as Exhibit 10 to Post-Effective Amendment No. 21 to the
Registration Statement on Form N-1A (File Nos. 2-63023 and 811-2884) and incorporated herein by
reference).
11 -- Consent of PricewaterhouseCoopers 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 the Registration
Statement on Form N-1A (File Nos. 2-63023 and 811-2884) and incorporated herein by reference.)
(b) -- Power of Attorney for Irving Brilliant, Lewis E. Daidone, B. Alexander Gaguine, Rosalind A. Kochman
and Irving Sonnenschein is filed herein.
27 -- Financial Data Schedule is filed herein.
</TABLE>

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

Not applicable.

ITEM 27. INDEMNIFICATION.

Reference is made to Article VIII 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, as amended (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 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.

C-2

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 Brothers Holding Company Inc, which is in turn wholly-owned by
Salomon Smith Barney Holdings Inc. which is, in turn, wholly-owned by Citigroup,
Inc., is an investment adviser registered under the Investment Advisers Act of
1940, as amended (the 'Advisers Act') 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 801-10642).

ITEM 29. PRINCIPAL UNDERWRITER

(a) CFBDS, Inc. acts as distributor for, in addition to the Fund, Salomon
Brothers Capital Fund Inc, Salomon Brothers Investors Fund Inc, Salomon Brothers
Series Funds Inc, Salomon Brothers Institutional Series Funds Inc and Salomon
Brothers Variable Series Funds Inc. CFBDS is also the distributor for the
following funds sponsored by Salomon Smith Barney Inc.: Concert Investment
Series, Consulting Group Capital Markets Funds, Global Horizons Investment
Series (Cayman Islands), Greenwich Street California Municipal Fund Inc.,
Greenwich Street Municipal Fund Inc., Greenwich Street Series Fund, High Income
Opportunity Fund Inc., The Italy Fund Inc., Managed High Income Portfolio Inc.,
Managed Municipals Portfolio II Inc., Managed Municipals Portfolio Inc.
Municipal High Income Fund Inc., Puerto Rico Daily Liquidity Fund Inc., Puerto
Rico Equity Index and Income Fund Inc., Smith Barney Adjustable Rate Government
Income Fund, Smith Barney Aggressive Growth Fund Inc., Smith Barney Appreciation
Fund Inc. Smith Barney Arizona Municipals Fund Inc., Smith Barney California
Municipals Fund Inc., Smith Barney Concert Allocation Series Inc., Smith Barney
Equity Funds, Smith Barney Fundamental Value Fund Inc., Smith Barney Funds Inc.,
Smith Barney Income Funds, Smith Barney Institutional Cash Management Fund,
Inc., Smith Barney Intermediate Municipal Fund, Inc., Smith Barney Investment
Funds Inc., Smith Barney Investment Trust, Smith Barney Managed Governments Fund
Inc., Smith Barney Managed Municipals Fund Inc., Smith Barney Massachusetts
Municipals Fund, Smith Barney Money Funds, Inc., Smith Barney Muni Funds, Smith
Barney Municipal Fund, Inc., Smith Barney Municipal Money Market Fund, Inc.,
Smith Barney Natural Resources Fund Inc., Smith Barney New Jersey Municipals
Fund Inc., Smith Barney Oregon Municipals Fund Inc., Smith Barney Principal
Return Fund, Smith Barney Small Cap Blend Fund, Inc., Smith Barney
Telecommunications Trust, Smith Barney Variable Account Funds, Smith Barney
World Funds, Inc., Smith Barney Worldwide Special Fund N.V. (Netherlands
Antilles), Travelers Series Fund Inc., The USA High Yield Fund N.V. (Netherlands
Antilles), Worldwide Securities Limited (Bermuda), Zenix Income Fund Inc. and
various series of unit investment trusts.

In addition, CFDBS is also the distributor for CitiFundsSM International
Growth & Income Portfolio, CitiFundsSM International Growth Portfolio,
CitiFundsSM Intermediate Income Portfolio, CitiFundsSM Short-Term U.S.
Government Income Portfolio, CitiFundsSM Large Cap Growth Portfolio, CitiFundsSM
Cash Reserves, CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Premium U.S.
Treasury Reserves, CitiFundsSM Premium Liquid Reserves, CitiFundsSM Tax Free
Reserves, CitiFundsSM California Tax Free Reserves, CitiFundsSM Connecticut Tax
Free Reserves, CitiFundsSM New York Tax Free Reserves, CitiFundsSM Balanced
Portfolio, CitiFundsSM Small Cap Value Portfolio, CitiFundsSM Growth & Income
Portfolio, CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM National Tax Free
Income Portfolio, CitiFundsSM New York Tax Free Income Portfolio, CitiFundsSM
California Tax Free Income Portfolio, CitiSelect'r' VIP Folio 200, CitiSelect'r'
VIP Folio 300, CitiSelect'r' VIP Folio 400, CitiSelect'r' VIP Folio 500,
CitiFundsSM Small Cap Growth VIP Portfolio, CitiSelect'r' Folio 200,
CitiSelect'r' Folio 300, CitiSelect'r' Folio 400, and CitiSelect'r' Folio 500.
CFBDS is also the placement agent for Large Cap Value Portfolio, Small Cap Value
Portfolio, International Portfolio, Foreign Bond

C-3

Portfolio, Intermediate Income Portfolio, Short-Term Portfolio, Growth & Income
Portfolio, Large Cap Growth Portfolio, Small Cap Growth Portfolio, International
Equity Portfolio, Balanced Portfolio, Government Income Portfolio, Tax Free
Reserves Portfolio, Cash Reserves Portfolio and U.S. Treasury Reserves
Portfolio.

(b) The information required by this Item 29 with respect to each director,
officer or partner of CFBDS is incorporated by reference to Schedule A of Form
BD filed by CFBDS pursuant to the Securities Exchange Act of 1934 (SEC File No.
8-32417).

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

(1) Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048

(2) Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116

(3) First Data Investor Services Group, Inc.
P.O. Box 5127
Westborough, Massachusetts 01581-5127

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-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Post-Effective Amendment
to the Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933, as amended, and has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and State of New York, on the 20th day
of November, 1998.

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 the Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------

<C> <S> <C>
/S/ IRVING BRILLIANT President and Director (Principal Executive November 20, 1998
......................................... Officer)
IRVING BRILLIANT

* Executive Vice President and Treasurer November 20, 1998
......................................... (Principal Financial Officer)
LEWIS E. DAIDONE

* Director November 20, 1998
.........................................
B. ALEXANDER GAGUINE

* Director November 20, 1998
.........................................
ROSALIND A. KOCHMAN

* Director November 20, 1998
.........................................
IRVING SONNENSCHEIN

*By: /S/ ROBERT VEGLIANTE
.........................................
ROBERT VEGLIANTE AS
ATTORNEY-IN-FACT
NOVEMBER 20, 1998
</TABLE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -------------------------------------------------------------------------------------------------

<C> <S> <C>
6(a) Distribution Agreement.
6(b) Form of Dealer Contract.
11 Consent of PricewaterhouseCoopers LLP, Independent Accountants.
16(b) Power of Attorney for Irving Brilliant, Lewis E. Daidone, B. Alexander Gaguine, Rosalind A.
Kochman and Irving Sonnenschein.
27 Financial Data Schedule.
</TABLE>

STATEMENT OF DIFFERENCES
------------------------

The registered trademark symbol shall be expressed as................. 'r'
The dagger symbol shall be expressed as............................... 'D'

<PAGE>

Exhibit 6(a)

SALOMON BROTHERS OPPORTUNITY FUND INC
DISTRIBUTION AGREEMENT

September 1, 1998

CFBDS, Inc.
21 Milk Street
Boston, MA 02109

Dear Sirs:

This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Fund") has agreed that you
shall be, for the period of this Agreement, the non-exclusive principal
underwriter and distributor of shares of the Fund. For purposes of this
Agreement, the term "Shares" shall mean shares of the Fund.

1. Services as Principal Underwriter and Distributor

1.1 You will act as agent for the distribution of Shares covered
by, and in accordance with, the registration statement, prospectus and statement
of additional information then in effect under the Securities Act of 1933, as
amended (the "1933 Act"), and the Investment Company Act of 1940, as amended
(the "1940 Act"), and will transmit or cause to be transmitted promptly any
orders received by you or those with whom you have sales or servicing agreements
for purchase or redemption of Shares to the Transfer and Dividend Disbursing
Agent for the Fund of which the Fund has notified you in writing.

1.2 You agree to use your best efforts to solicit orders for the
sale of Shares. It is contemplated that you will enter into sales or servicing
agreements with registered securities brokers and banks and into servicing
agreements with financial institutions and other industry professionals, such as
investment advisers, accountants and estate planning firms. In entering into
such agreements, you will act only on your own behalf as principal underwriter
and distributor. You will not be responsible for making any distribution plan or
service fee payments pursuant to any plans the Fund may adopt or agreements it
may enter into.

1.3 You shall act as the non-exclusive principal underwriter and
distributor of Shares in compliance with all applicable laws, rules, and
regulations, including, without limitation, all rules and regulations made or
adopted from time to time by the Securities and Exchange Commission (the "SEC")
pursuant to the 1933 Act or the 1940 Act or by any securities association
registered under the Securities Exchange Act of 1934, as amended.

1.4 Whenever in their judgment such action is warranted for any
reason, including, without limitation, market, economic or political conditions,
the Fund's officers may decline to accept any orders for, or make any sales of,
any Shares until such time as those officers deem it advisable to accept such
orders and to make such sales and the Fund shall advise you promptly of such
determination.

2. Duties of the Fund

2.1 The Fund agrees to pay all costs and expenses in connection
with the registration of Shares under the 1933 Act, and all expenses in
connection with maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished by the Fund
hereunder, and all expenses in connection with the preparation and printing of
the Fund's prospectuses and statements of additional information for regulatory
purposes and for distribution to shareholders; provided however, that nothing
contained herein shall be deemed to require the Fund to pay any costs of
advertising or marketing the sale of Shares.

2.2 The Fund agrees to execute any and all documents and to
furnish any and all information and otherwise to take any other actions that may
be reasonably necessary in the discretion of the Fund's officers in connection
with the qualification of Shares for sale in such states and other U.S.
jurisdictions as the Fund may approve and designate to you from time to time,
and the Fund agrees to pay all expenses that may be incurred in connection with
such qualification. You shall pay all expenses connected with your own
qualification as a securities broker or dealer under state or Federal laws and,
except as otherwise specifically provided in this Agreement, all other expenses
incurred by you in connection with the sale of Shares as contemplated in this
Agreement.

2.3 The Fund shall furnish you from time to time, for use in
connection with the sale of Shares, such information reports with respect to the
Fund and the Shares as you may reasonably request, all of which shall be signed
by one or more of the Fund's duly authorized officers; and the Fund warrants
that the statements contained in any such reports, when so signed by the Fund's
officers, shall be true and correct. The Fund also shall furnish you upon
request with (a) the reports of the annual audits of the financial statements of
the Fund made by independent certified public accountants retained by the Fund
for such purpose; (b) semi-annual unaudited financial statements pertaining to
the Fund; (c) quarterly earnings statements prepared by the Fund; (d) a monthly
itemized list of the securities in the Fund's portfolio; (e) monthly balance
sheets as soon as practicable after the end of each month; (f) the current net
asset value and offering price per share for the Fund on each day such net asset
value is computed; and (g) from time to time such additional information
regarding the financial condition of the Fund as you may reasonably request.

3. Representations and Warranties

The Fund represents to you that all registration statements,
prospectuses and statements of additional information filed by the Fund with the
SEC under the 1933 Act and the 1940 Act with respect to the Shares have been
prepared in conformity with the requirements of said Acts and the rules and
regulations of the SEC thereunder. As used in this Agreement, the terms
"registration statement", "prospectus" and "statement of additional information"
shall mean any registration statement, prospectus and statement of additional
information filed by the Fund with

the SEC and any amendments and supplements thereto filed by the Fund with the
SEC. The Fund represents and warrants to you that any such registration
statement, prospectus and statement of additional information, when such
registration statement becomes effective and as such prospectus and statement of
additional information are amended and supplemented, includes at the time of
such effectiveness, amendment or supplement all statements required to be
contained therein in conformance with the 1933 Act, the 1940 Act and the rules
and regulations of the SEC; that all statements of material fact contained in
any registration statement, prospectus or statement of additional information
will be true and correct when such registration statement becomes effective; and
that neither any registration statement nor any prospectus or statement of
additional information when such registration statement becomes effective will
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading to a purchaser of the Fund's Shares. The Fund may, but shall not be
obligated to, propose from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any prospectus or
statement of additional information as, in the light of future developments,
may, in the opinion of the Fund, be necessary or advisable. If the Fund shall
not propose such amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from you to do so,
you may, at your option, terminate this Agreement or decline to make offers of
the Fund's Shares until such amendments are made. The Fund shall not file any
amendment to any registration statement or supplement to any prospectus or
statement of additional information without giving you reasonable notice thereof
in advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information, of whatever character, as the Fund may deem advisable,
such right being in all respects absolute and unconditional.

4. Indemnification

4.1 The Fund authorizes you to use any prospectus or statement of
additional information furnished by the Fund from time to time, in connection
with the sale of Shares. The Fund agrees to indemnify, defend and hold you, your
several officers and directors, and any person who controls you within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any such
counsel fees incurred in connection therewith) which you, your officers and
directors, or any such controlling person, may incur under the 1933 Act or under
common law or otherwise, arising out of or based upon any untrue statement, or
alleged untrue statement, of a material fact contained in any registration
statement, any prospectus or any statement of additional information or arising
out of or based upon any omission, or alleged omission, to state a material fact
required to be stated in any registration statement, any prospectus or any
statement of additional information or necessary to make the statements in any
of them not misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any statements or representations made by you or your representatives or
agents other than such statements and representations as are contained in any
prospectus or statement of additional information and in such financial and
other statements as are furnished to you pursuant to paragraph 2.3 of this
Agreement; and further provided that the Fund's agreement to indemnify you and
the Fund's representations and warranties herein before set forth in paragraph 3
of this Agreement shall not

be deemed to cover any liability to the Fund or its shareholders to which you
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or by reason of your reckless
disregard of your obligations and duties under this Agreement. The Fund's
agreement to indemnify you, your officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Fund's being
notified of any action brought against you, your officers or directors, or any
such controlling person, such notification to be given by letter or by telegram
addressed to the Fund at its principal office in New York, New York and sent to
the Fund by the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been served. The
failure so to notify the Fund of any such action shall not relieve the Fund from
any liability that the Fund may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Fund's indemnity agreement
contained in this paragraph 4.1. The Fund will be entitled to assume the defense
of any suit brought to enforce any such claim, demand or liability, but, in such
case, such defense shall be conducted by counsel of good standing chosen by the
Fund. In the event the Fund elects to assume the defense of any such suit and
retains counsel of good standing, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but if the Fund does not elect to assume the defense of any such suit, the Fund
will reimburse you, your officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the reasonable fees
and expenses of any counsel retained by you or them. The Fund's indemnification
agreement contained in this paragraph 4.1 and the Fund's representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you, your officers and
directors, or any controlling person, and shall survive the delivery of any of
the Fund's Shares. This agreement of indemnity will inure exclusively to your
benefit, to the benefit of your several officers and directors, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Fund agrees to notify you promptly of the commencement of any
litigation or proceedings against the Fund or any of its officers or Board
members in connection with the issuance and sale of any of the Fund's Shares.

4.2 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the 1933 Act, free and harmless from and against any
and all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) that the Fund, its officers or Board
members or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its officers or Board members, or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in information
furnished in writing by you to the Fund and used in the answers to any of the
items of the registration statement or in the corresponding statements made in
the prospectus or statement of additional information, or shall arise out of or
be based upon any omission, or alleged omission, to state a material fact in
connection with such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such information not
misleading. Your agreement to indemnify the Fund, its officers or Board members,
and any such controlling person, as aforesaid, is expressly conditioned upon
your being notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification to be given by
letter or telegram addressed to you at your principal office in Boston,
Massachusetts and sent to you by the person against whom such

action is brought, within ten days after the summons or other first legal
process shall have been served. You shall have the right to control the defense
of such action, with counsel of your own choosing, satisfactory to the Fund, if
such action is based solely upon such alleged misstatement or omission on your
part or with the Fund's consent, and in any other event the Fund, its officers
or Board members or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action with
counsel of its own choosing reasonably acceptable to you but shall not have the
right to settle any such action without your consent, which will not be
unreasonably withheld. The failure to so notify you of any such action shall not
relieve you from any liability that you may have to the Fund, its officers or
Board members, or to such controlling person by reason of any such untrue, or
alleged untrue, statement or omission, or alleged omission, otherwise than on
account of your indemnity agreement contained in this paragraph 4.2. You agree
to notify the Fund promptly of the commencement of any litigation or proceedings
against you or any of your officers or directors in connection with the issuance
and sale of any of the Fund's Shares.

5. Effectiveness of Registration

No Shares shall be offered by either you or the Fund under any of the
provisions of this Agreement and no orders for the purchase or sale of such
Shares under this Agreement shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act, or if and so long as a current prospectus as required by Section 5(b) (2)
of the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 5 shall in any way restrict or have any application
to or bearing upon the Fund's obligation to repurchase its Shares from any
shareholder in accordance with the provisions of the Fund's prospectus,
statement of additional information or charter documents, as amended from time
to time.

6. Offering Price

Shares of any class of the Fund offered for sale by you shall be offered
for sale at a price per share (the "offering price") equal to (a) their net
asset value (determined in the manner set forth in the Fund's charter documents
and the then-current prospectus and statement of additional information) plus
(b) a sales charge, if applicable, which shall be the percentage of the offering
price of such Shares as set forth in the Fund's then-current prospectus. In
addition to or in lieu of any sales charge applicable at the time of sale,
Shares of any class of the Fund offered for sale by you may be subject to a
contingent deferred sales charge as set forth in the Fund's then-current
prospectus and statement of additional information. You shall be entitled to
receive any sales charge levied at the time of sale in respect of the Shares
without remitting any portion to the Fund. Any payments to a broker or dealer
through whom you sell Shares shall be governed by a separate agreement between
you and such broker or dealer and the Fund's then-current prospectus and
statement of additional information. Any payments to any provider of services to
you shall be governed by a separate agreement between you and such service
provider.

7. Notice to You

The Fund agrees to advise you immediately in writing:

(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in
effect or for additional information;

(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement, prospectus
or statement of additional information then in effect or the initiation
of any proceeding for that purpose;

(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement, prospectus or
statement of additional information then in effect or that requires the
making of a change in such registration statement, prospectus or
statement of additional information in order to make the statements
therein not misleading; and

(d) of all actions of the SEC with respect to any amendment to
the registration statement, or any supplement to the prospectus or
statement of additional information which may from time to time be filed
with the SEC.

8. Term of the Agreement

This Agreement shall become effective on the date hereof, shall have an
initial term of one year from the date hereof, and shall continue for successive
annual periods thereafter so long as such continuance is specifically approved
at least annually by (a) the Fund's Board or (b) by a vote of a majority (as
defined in the 1940 Act) of the Fund's outstanding voting securities, provided
that in either event the continuance is also approved by a majority of the Board
members of the Fund who are not interested persons (as defined in the 1940 Act)
of any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable with or
without cause, without penalty, on 60 days' notice by the Fund's Board or by
vote of holders of a majority of the Fund's outstanding voting securities, or on
90 days' notice by you. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act and the rules and
regulations thereunder).

9. Arbitration

Any claim, controversy, dispute or deadlock arising under this Agreement
(collectively, a "Dispute") shall be settled by arbitration administered under
the rules of the American Arbitration Association ("AAA") in New York, New York.
Any arbitration and award of the arbitrators, or a majority of them, shall be
final and the judgment upon the award rendered may be entered in any state or
federal court having jurisdiction. No punitive damages are to be awarded.

10. Miscellaneous

So long as you act as a principal underwriter and distributor of Shares,
you shall not perform any services for any entity other than investment
companies advised or administered by Citigroup Inc. or its subsidiaries. The
Fund recognizes that the persons employed by you to assist in the performance of
your duties under this Agreement may not devote their full time to such service
and nothing contained in this Agreement shall be deemed to limit or restrict the
persons employed by you or any of your affiliates right to engage in and devote
time and

attention to other businesses or to render services of whatever kind or
nature, provided, however, that in conducting such business or rendering such
services your employees and affiliates would take reasonable steps to assure
that the other parties involved are put on notice as to the legal entity with
which they are dealing. This Agreement and the terms and conditions set forth
herein shall be governed by, and construed in accordance with, the laws of the
State of New York without giving effect to its conflict of interest principles.

If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us the
enclosed copy, whereupon this Agreement will become binding on you.

Very truly yours,
Salomon Brothers Opportunity Fund Inc

By:
--------------------------------

Accepted:

CFBDS, INC.

By:
------------------------
Authorized Officer

<PAGE>

Exhibit 6(b)

DEALER CONTRACT

CFBDS, Inc.
21 Milk Street
Boston, Massachusetts 02109

[Name of Broker-Dealer]
- -----------------------
- -----------------------
- -----------------------

Ladies and Gentlemen:

We, CFBDS, Inc. ("CFBDS"), have agreements with certain
investment companies for which Salomon Brothers Asset Management Inc serves as
investment adviser (each a "Fund") pursuant to which we act as the nonexclusive
principal underwriter and distributor for the sale of shares of capital stock
("shares") of the various series of such Funds, and as such have the right to
distribute shares for resale. Each Fund is an open-end investment company
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
and the shares being offered to the public are registered under the Securities
Act of 1933, as amended (the "1933 Act"). Each series of each Fund covered by a
Distribution Agreement from time to time is referred to in this agreement as a
"Series" and collectively as the "Series." The term "Prospectus", as used
herein, refers to the prospectus and related statement of additional information
(the "Statement of Additional Information") incorporated therein by reference
(as amended or supplemented) on file with the Securities and Exchange Commission
at the time in question. As a broker in the capacity of principal underwriter
and distributor for the Series, we offer to sell to you, as a broker or dealer,
shares of each Fund upon the following terms and conditions:

1. In all sales to the public you shall act as broker dealer for your
customers or as dealer for your own account, and in no transaction shall you
have any authority to act as agent for the Funds, for us or for any other
dealer.

2. Orders received from you will be accepted through us only at the
public offering price per share (i.e. the net asset value per share plus the
applicable front-end sales charge, if any) applicable to each order, and all
orders for redemption of any shares shall be executed at the net asset value per
share less any contingent deferred sales charge, if any, in each case as set
forth in the Prospectus. Any contingent deferred sales charge amounts received
or retained by you shall be paid over by you directly to Tower Square Securities
Inc. or its designated affiliate ("TSS") in partial consideration of its payment
to you of commission amounts at the time of sale. The procedure relating to the
handling of orders shall be subject to paragraph 4 hereof and instructions which
we or the Fund shall forward from time to time to you. All orders are subject to
acceptance or rejection by the applicable Fund or us in the sole discretion of
either. The minimum initial purchase and the minimum subsequent purchase of any
shares shall be as set forth in the Prospectus pertaining to the relevant
Series.

3. You shall not place orders for any shares unless you have already
received purchase orders for those shares at the applicable public offering
price and subject to the terms hereof. You agree that you will not offer or sell
any shares except under circumstances that will result in compliance with the
applicable Federal and state securities laws, the applicable rules and
regulations thereunder and the rules and regulations of applicable regulatory
agencies or authorities and that in connection with sales and offers to sell
shares you will furnish to each person to whom any such sale or offer is made, a
copy of the Prospectus and, upon request, the Statement of Additional
Information, and will not furnish to any person any information relating to
shares which is inconsistent in any respect with the information contained in
the Prospectus or Statement of Additional Information (as then amended or
supplemented). You shall not furnish or cause to be furnished to any person or
display or publish any information or materials relating to the shares
(including, without limitation, promotional materials and sales literature,
advertisements, press releases, announcements, statements, posters, signs or
other similar material), except such information and materials as may be
furnished to you by, or on behalf of, us or the Funds, and such other
information and materials as may be approved in writing by, or on behalf of, us
or the Funds.

4. As a broker dealer, you are hereby authorized (i) to place orders
directly with the applicable Fund or Series for shares subject to the applicable
terms and conditions governing the placement of orders by us set forth in the
Prospectus and (ii) to tender shares directly to each Fund or its agent for
redemption subject to the applicable terms and conditions governing the
redemption of shares applicable to us set forth in the Prospectus.

5. You shall not withhold placing orders received from your customers so
as to profit yourself as a result of such withholding, e.g., by a change in the
"net asset value" from that used in determining the offering price to your
customers.

6. In determining the amount of any sales concession payable to you
hereunder, we reserve the right to exclude any sales which we reasonably
determine are not made in accordance with the terms of the Prospectus and the
provisions of this Agreement. Unless at the time of transmitting an order we
advise you or the transfer agent to the contrary, the shares ordered will be
deemed to be the total holdings of the specified investor.

7. (a) You agree that payment for orders from you for the purchase of
shares will be made in accordance with the terms of the Prospectus. On or before
the business day following the settlement date of each purchase order for
shares, you shall transfer same day funds to an account designated by us with
the transfer agent in an amount equal to the public offering price on the date
of purchase of the shares being purchased less your sales concession, if any,
with respect to such purchase order determined in accordance with the
Prospectus. If payment for any purchase order is not received in accordance with
the terms of the Prospectus, we reserve the right, without notice, to cancel the
sale and to hold you responsible for any loss sustained as a result thereof.

(b) If any shares sold under the terms of this Agreement are sold
with a sales charge and are redeemed or are tendered for redemption within seven
(7) business days after confirmation of your purchase order for such shares: (i)
you shall forthwith refund to us the full sales concession received by you on
the sale; and (ii) we shall forthwith pay to the applicable Series our portion
of the sales charge on the sale which has been retained by us, if any, and shall
also pay to the applicable Series the amount refunded by you.

(c) TSS will pay or cause to be paid to you any ongoing trail
commission and/or shareholder service fees with respect to shares of the Series
purchased through you and held by or for your customers at such rates and in
such manner as may be described in the Prospectus.

(d) Certificates evidencing shares shall be available only upon
request. Upon payment for shares in accordance with paragraph 7(a) above, the
transfer agent will issue and transmit to you or your customer a confirmation
statement evidencing the purchase of such shares. Any transaction in
uncertificated shares, including purchases, transfers, redemptions and
repurchases, shall be effected and evidenced by book-entry on the records of the
transfer agent.

8. No person is authorized to make any representations concerning shares
except those contained in the current Prospectus and Statement of Additional
Information and in printed information subsequently issued by us or the Funds as
information supplemental to the Prospectus and the Statement of Additional
Information. In purchasing or offering shares pursuant to this Agreement you
shall rely solely on the representations contained in the Prospectus, the
Statement of Additional Information and the supplemental information above
mentioned.

9. You agree to deliver to each purchaser making a purchase of shares
from or through you a copy of the Prospectus at or prior to the time of offering
or sale, and, upon request, the Statement of Additional Information. You may
instruct the transfer agent to register shares purchased in your name and
account as nominee for your customers. You agree thereafter to deliver to any
purchaser whose shares you or your nominee are holding as record holder copies
of the annual and interim reports and proxy solicitation materials and any other
information and materials relating to the Funds and prepared by or on behalf of
us, the Funds or the investment adviser, custodian, transfer agent or dividend
disbursing agent for distribution to beneficial holders of shares. The Funds
shall be responsible for the costs associated with forwarding such reports,
materials and other information and shall reimburse you in full for such costs.
You further agree to make reasonable efforts to endeavor to obtain proxies from
such purchasers whose shares you or your nominee are holding as record holder.
You further agree to obtain from each customer to whom you sell shares any
taxpayer identification number certification required under Section 3406 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated thereunder, and to provide us or our designee with timely written
notice of any failure to obtain such taxpayer identification number
certification in order to enable the implementation of any required backup
withholding in accordance with Section 3406 of the Code and the regulations
thereunder. Additional copies of the Prospectus, Statement of Additional
Information, annual or interim reports, proxy solicitation materials and any
such other information and materials relating to the Funds will be supplied to
you in reasonable quantities upon request.

10. (a) In accordance with the terms of the Prospectus, a reduced sales
charge may be available to customers, depending on the amount of the investment
or proposed investment. In each case where a reduced sales charge is applicable,
you agree to furnish to the transfer agent sufficient information to permit
confirmation of qualification for a reduced sales charge, and acceptance of the
purchase order is subject to such confirmation. Reduced sales charges may be
modified or terminated at any time in the sole discretion of each Fund.

(b) You acknowledge that certain classes of investors may be
entitled to purchase shares at net asset value without a sales charge as
provided in the Prospectus and Statement of Additional Information.

(c) You agree to advise us promptly as to the amount of any and
all sales by you qualifying for a reduced sales charge or no sales charge.

(d) Exchanges (i.e., the investment of the proceeds from the
liquidation of shares of one Series in the shares of another Series, each of
which is managed by the same or an affiliated investment adviser) shall, where
available, be made in accordance with the terms of each Prospectus.

11. We and each Fund reserve the right in our discretion, without
notice, to suspend sales or withdraw the offering of any shares entirely. Each
party hereto has the right to cancel the portions of this Agreement to which it
is party upon notice to the other parties; provided, however, that no
cancellation shall affect any party's obligations hereunder with respect to any
transactions or activities occurring prior to the effective time of
cancellation. We reserve the right to amend this Agreement in any respect
effective on notice to you.

12. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering of
shares. We shall be under no liability to you except for lack of good faith and
for obligations expressly assumed by us herein. Nothing contained in this
paragraph 12 is intended to operate as, and the provisions of this paragraph 12
shall not in any way whatsoever constitute a waiver by you of compliance with,
any provisions of the 1933 Act or of the rules and regulations of the Securities
and Exchange Commission issued thereunder.

13. You agree that: (a) you shall not effect any transactions
(including, without limitation, any purchases and redemptions) in any shares
registered in the name of, or beneficially owned by, any customer unless such
customer has granted you full right, power and authority to effect such
transactions on his behalf, (b) we shall have full authority to act upon your
express instructions to sell, repurchase or exchange shares through us on behalf
of your customers under the terms and conditions provided in the Prospectus and
(c) we, the Funds, the investment adviser, the administrator, the transfer agent
and our and their respective officers, directors or trustees, agents, employees
and affiliates shall not be liable for, and shall be fully indemnified and held
harmless by you from and against, any and all claims, demands, liabilities and
expenses (including, without limitation, reasonable attorneys' fees) which may
be incurred by us or any of the foregoing persons entitled to indemnification
from you hereunder arising out of or in connection with (i) the execution of any
transactions in shares registered in the name of, or beneficially owned by, any
customer in reliance upon any oral or written instructions believed to be
genuine and to have been given by or on behalf of you, (ii) any statements or
representations that you or your employees or representatives make concerning
the Funds that are inconsistent with the applicable Fund's Prospectus, (iii) any
written materials used by you or your employees or representatives in connection
with making offers or sales of shares that were not furnished by us, the Funds
or the investment adviser or an affiliate thereof and (iv) any sale of shares of
a Fund where the Fund or its shares were not properly registered or qualified
for sale in any state, any U.S. territory or the District of Columbia, when we
have indicated to you that the Fund or its shares were not properly registered
or qualified. The indemnification agreement contained in this Paragraph 13 shall
survive the termination of this Agreement.

14. You represent that: (a) you are a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"), or, if a foreign
dealer who is not eligible for membership in the NASD, that (i) you will not
make any sales of shares in, or to nationals of, the United States of America,
its territories or its possessions, and (ii) in making any sales of shares you
will comply with the NASD's Conduct Rules and (b) you are a member in good
standing of the Securities Investor Protection Corporation ("SIPC"). You agree
that you will provide us with timely written notice of any change in your NASD
or SIPC status.

15. We shall inform you as to the states or other jurisdictions in which
the Fund has advised us that shares have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such states,
but we assume no responsibility or obligation as to your qualification to sell
shares in any jurisdiction.

16. Any claim, controversy, dispute or deadlock arising under this
agreement (collectively, a "Dispute") shall be settled by arbitration
administered under the rules of the American Arbitration Association ("AAA") in
New York, New York. Any arbitration and award of the arbitrators, or a majority
of them, shall be final and the judgment upon the award rendered may be entered
in any state or federal court having jurisdiction. No punitive damages are to be
awarded.

17. All communications to us should be sent, postage prepaid, to 21 Milk
Street, Boston, Massachusetts 02109 Attention: Philip Coolidge. Any notice to
you shall be duly given if mailed, telegraphed or telecopied to you at the
address specified by you below. Communications regarding placement of orders for
shares should be sent, postage prepaid, to First Data Investor Services Group,
Inc., P.O. Box 5128, Westborough, Massachusetts 01581-5128.

18. This Agreement shall be binding upon both parties hereto when signed
by us and accepted by you in the space provided below, and your obligations to
TSS under the second sentence of paragraph 2 hereof shall be binding on you
directly to TSS when such provisions are accepted by it in the space provided
below; provided, however, that you shall not have any obligations hereunder
other than in respect of the duties and agreements expressly undertaken and made
by you herein.

19. This Agreement and the terms and conditions set forth herein shall
be governed by, and construed in accordance with, the laws of the State of New
York.

CFBDS, INC.

By:
(Authorized Signature)

Please return one signed copy of this Contract to:

CFBDS, Inc.
21 Milk Street
Boston, Massachusetts 02109
Attention: Philip Coolidge

Accepted:

Firm Name:

By:

Address:

Accepted By (signature):

Name (print): Title:

Date:

Accepted:

Tower Square Securities Inc.
New York, New York

By:_______________________
Title:

Date:_____________________

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 22 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated October 21, 1998, relating to the financial
statements and financial highlights of The Salomon Brothers Opportunity Fund
Inc, which are also incorporated by reference into the Registration Statement.
We also consent to the reference to us under the heading "Independent
Accountants" in the Statement of Additional Information and to the reference
to us under the heading "Financial Highlights" in the Prospectus.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
November 20, 1998

<PAGE>

EXHIBIT 16(b)

POWER OF ATTORNEY

We, the undersigned, hereby severally constitute and appoint Robert
Vegliante and Anthony Pace, 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:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----

<S> <C> <C>
/s/ IRVING BRILLIANT President and Director November 13, 1998
.........................................
IRVING BRILLIANT

/s/ LEWIS E. DAIDONE Executive Vice President and Treasurer November 13, 1998
.........................................
LEWIS E. DAIDONE

/s/ B. ALEXANDER GAGUINE Director November 13, 1998
.........................................
B. ALEXANDER GAGUINE

/s/ ROSALIND A. KOCHMAN Director November 13, 1998
.........................................
ROSALIND A. KOCHMAN

/s/ IRVING SONNENSCHEIN Director November 13, 1998
.........................................
IRVING SONNENSCHEIN

</TABLE>

<PAGE>

<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information
extracted from The Salomon Brothers Opportunity Fund
Inc form N-SAR for the period ended August 31, 1998
and is qualified in its entirety by reference to
such financial statements.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 75,381,813
<INVESTMENTS-AT-VALUE> 176,778,803
<RECEIVABLES> 773,555
<ASSETS-OTHER> 975
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 177,553,333
<PAYABLE-FOR-SECURITIES> 71,538
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,649
<TOTAL-LIABILITIES> 284,187
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 59,941,811
<SHARES-COMMON-STOCK> 3,742,735
<SHARES-COMMON-PRIOR> 3,722,380
<ACCUMULATED-NII-CURRENT> 1,027,853
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,902,492
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 101,396,990
<NET-ASSETS> 177,269,146
<DIVIDEND-INCOME> 2,511,339
<INTEREST-INCOME> 1,536,313
<OTHER-INCOME> 0
<EXPENSES-NET> 2,327,379
<NET-INVESTMENT-INCOME> 1,720,273
<REALIZED-GAINS-CURRENT> 15,568,652
<APPREC-INCREASE-CURRENT> (22,723,931)
<NET-CHANGE-FROM-OPS> (5,435,006)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,444,133
<DISTRIBUTIONS-OF-GAINS> 5,165,552
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 97,900
<NUMBER-OF-SHARES-REDEEMED> 176,190
<SHARES-REINVESTED> 98,645
<NET-CHANGE-IN-ASSETS> (11,226,656)
<ACCUMULATED-NII-PRIOR> 729,573
<ACCUMULATED-GAINS-PRIOR> 4,521,532
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,080,479
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,327,379
<AVERAGE-NET-ASSETS> 208,033,455
<PER-SHARE-NAV-BEGIN> 50.64
<PER-SHARE-NII> 0.46
<PER-SHARE-GAIN-APPREC> (1.95)
<PER-SHARE-DIVIDEND> (0.39)
<PER-SHARE-DISTRIBUTIONS> (1.40)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 47.36
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

<PAGE>