This excerpt taken from the C DEF 14A filed Jun 18, 2009.
Background and Reasons for the Authorized Preferred Stock Increase
Citigroup is authorized under our current restated certificate of incorporation to issue up to 30 million shares of preferred stock having a par value of $1.00 per share. The board of directors has the authority to issue the preferred stock in one or more series and to fix the number of shares constituting such series, the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by common shareholders.
The board of directors believes that it is in the best interests of Citigroup and its shareholders to increase the amount of authorized preferred stock to a total of 2 billion shares to provide sufficient shares for general corporate purposes, to be issued as deemed advisable by the board of directors without further action or authorization by the stockholders.
The board believes that the increase in authorized shares of preferred stock will enhance Citigroups flexibility to meet changing financial conditions and satisfy its future financing and capitalization needs. In addition, the authority of the board of directors to issue preferred stock could be used to discourage attempts by others to gain control of the company through a merger, tender offer, proxy or consent solicitation, or otherwise, by making such attempts more difficult to achieve and more costly.