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424B3
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form 424B3 on 09/02/1999
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<PAGE>   75
 
     In February 1999, Charter Holdings adopted an option plan, which was
assumed by Charter Communications Holding Company in May 1999, providing for the
grant of options to purchase up to 10% of the aggregate equity value of the
subsidiaries of Charter Communications Holding Company as of February 1999. The
option plan provides for grants of options to employees and consultants of
Charter Communications Holding Company and its affiliates and consultants who
provide services to Charter Communications Holding Company. Options granted will
be fully vested after five years from the date of grant. Options not exercised
accumulate and are exercisable, in whole or in part, in any subsequent period,
but not later than ten years from the date of grant.
 

<TABLE>
<CAPTION>
                                                                                        OPTIONS
                                             OPTIONS OUTSTANDING                      EXERCISABLE
                          ---------------------------------------------------------   -----------
                          NUMBER OF    EXERCISE      TOTAL       REMAINING CONTRACT    NUMBER OF
                           OPTIONS      PRICE       DOLLARS       LIFE (IN YEARS)       OPTIONS
                          ----------   --------   ------------   ------------------   -----------
<S>                       <C>          <C>        <C>            <C>                  <C>
Outstanding as of
  January 1, 1999(1)....   7,044,127    $20.00    $140,882,540          9.4            1,761,032
Granted:
  February 9, 1999(2)...   9,050,881     20.00     181,017,620          9.5                   --
  April 5, 1999(2)......     443,200     20.73       9,187,536          9.7                   --
                          ----------    ------    ------------          ---            ---------
Outstanding as of
  June 30, 1999.........  16,538,208    $20.02    $331,087,696          9.5            1,761,032
                          ==========    ======    ============          ===            =========
</TABLE>

 
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(1) Granted to Jerald L. Kent pursuant to his employment agreement and related
    option agreement.
 
(2) Granted pursuant to the option plan.
 
     We follow Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" to account for the option plans. Stock option compensation
expense is recorded in the financial statements since the exercise prices are
less than the estimated fair values of the underlying membership interests on
the date of grant. Compensation expense is accrued over the vesting period of
each grant that varies from four to five years.
 
ACCOUNTING STANDARD NOT YET IMPLEMENTED
 
     In June 1998, the Financial Accounting Standards Board adopted SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments embedded in
other contracts, be recorded in the balance sheet as either an asset or
liability measured at its fair value and that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset related results on the hedged item in the income
statement, and requires that a company must formally document, designate and
assess the effectiveness of transactions that receive hedge accounting. SFAS No.
137 "Accounting for Derivative Instruments and Hedging Activities -- Deferral of
the Effective Date of FASB Statement No. 133 -- An Amendment of FASB No. 133"
has delayed the effective date of SFAS No. 133 to fiscal years beginning after
June 15, 2000. We have not yet quantified the impacts of adopting SFAS No. 133
on our consolidated financial statements nor have we determined the timing or
method of our adoption of SFAS No. 133. However, SFAS No. 133 could increase
volatility in earnings (loss).
 
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