Authorized and unissued preferred stock, the terms and conditions of which may be expressly determined by a corporation's board of directors. To create blank-check preferred stock, a corporation must provide for the blank check preferred stock in its certificate of incorporation by:

Once issued, the specific powers, rights and preferences of the preferred stock can be set out in a certificate of designation (known as a certificate of amendment in New York) and filed with the state as an amendment to the certificate of incorporation. Blank-check preferred stock can be used to raise additional funds or as a anti-takeover defense. The inclusion of a blank-check preferred stock provision is used as an anti-takeover defense because the board of directors can use it to create a new series of preferred stock that may have special voting, conversion or control rights which could make a takeover more difficult.

For an example of a blank-check preferred stock provision, see Standard Clause, Certificate of Incorporation: Blank-check Preferred Stock. For more information on preferred stock generally, see Practice Notes, Preferred Stock: Overview and Preferred Stock in Private Equity Transactions: Significant Tax Issues.