Preemptive rights give an existing shareholder the right to purchase a proportionate share of any new issuance of shares before it is offered to others. If an existing shareholder owned 10% of the issued and outstanding stock in a corporation for which the corporation recognized preemptive rights, the existing shareholder would then be entitled to purchase enough shares of any new issue of stock to maintain his/her 10% ownership before any stock is offered to others. The purpose of preemptive rights is to protect existing shareholders from diluting their value and control in the corporation. In most states, preemptive rights are not automatic and must be agreed to by the incorporators and stated in the articles of incorporation if they are to be enforced.