step-up

step-up

A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. For example, a warrant may permit its owner to purchase ten shares of stock at $20 per share up to a specified date and at $22.50 per share thereafter until the warrant expires. The step-up works to the disadvantage of the holder, however. It is not a feature of most of these securities.