A class of preferred stock that is authorized for issuance in a corporation’s certificate of incorporation (specifically in an amendment known as a certificate of designation or a certificate of amendment) The board of directors is solely granted the power (blank check) to specify the rights, powers, and preferences of the preferred stock, without shareholders’ approval.
Blank-check preferred stock can be used to raise additional funds or as a anti-takeover tactical defense. In the latter case, the board of directors can issue blank-check preferred stock bearing special voting, conversion or control rights which could hinder a takeover attempt.
