8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: (Date of earliest event reported): May 20, 2009 (May 13, 2009).

CELL THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Washington	001-12465	91-1533912
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

501 Elliott Avenue West, Suite 400

Seattle, Washington 98119

(Address of principal executive offices)

Registrant’s telephone number, including area code: (206) 282-7100

Not applicable

(Former name or former address, if changed since last report).

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On May 13, 2009, Cell Therapeutics, Inc. (the “Company”) entered into an agreement (the “Severance Agreement”) with the unions representing the employees of its Bresso, Italy operations in connection with the previously announced closure of the Company’s Bresso facilities. The Company issued a press release announcing that it had entered into the Severance Agreement, a copy of which was filed as Exhibit 99.1 to the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2009. The Severance Agreement relates to a reduction in force of 56 positions at the Bresso facility. In addition, the Company has sent notices of termination to the six managers of the Bresso facility and will endeavor to enter into separate severance arrangements with these managers. The Bresso facility was used for pre-clinical research and was underutilized due to the Company’s focused business model on the development of late stage compounds and their commercialization. The Company expects to complete the closure of the Bresso facility by August 2009.

An English translation of the Severance Agreement is attached as Exhibit 10.1 to the Form 8-K.

Item 2.05. Costs Associated with Exit or Disposal Activities.

In connection with the reduction in force and closure of the Bresso facility described in Item 1.01 above, the Company currently estimates that it will incur restructuring charges related to severance costs between $2.3 million and $3.1 million (which includes an estimate of the amounts payable to the managers of the Bresso facility) during the second quarter of 2009. These estimated costs will be paid over 42 months from the date of termination, with the majority paid throughout the first 13 months. The Company expects restructuring costs related to operating leases and clean-up activities of the Bresso facility’s laboratories, excluding proceeds from the liquidation of the physical assets, will range from $1.3 million to $1.6 million. The preceding amounts are estimates and the actual amounts and timing of such costs may vary materially as the closure plans are finalized and implemented.

This Current Report on Form 8-K includes forward-looking statements that involve a number of risks and uncertainties, the outcome of which could materially and/or adversely affect actual future results. Specifically, the risks and uncertainties that could affect the development of products include risks associated with preclinical and clinical developments in the biopharmaceutical industry in general, determinations by regulatory, patent and administrative governmental authorities, competitive factors, technological developments, costs of developing, the Company’s ability to continue to raise capital as needed to fund its operation, the Company’s reduction in annual operating expenses may be less than projected and the risk factors listed or described from time to time in the Company’s filings with the Securities and Exchange Commission including, without limitation, the Company’s most recent filings on Forms 10-K, 10-Q, and 8-K. Except as may be required by law, the Company does not intend to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
10.1	English translation of Severance Agreement, dated May 13, 2009.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CELL THERAPEUTICS, INC.
Date: May 20, 2009	By:	/s/ Louis A. Bianco
		Louis A. Bianco Executive Vice President, Finance and Administration

EXHIBIT INDEX

Exhibit Number	Description
10.1	English translation of Severance Agreement, dated May 13, 2009.

EX-10.1

Exhibit 10.1

Regione Lombardia

PROCEDURE FOR THE DECLARATION OF MOBILITY

Articles 4 and 24 of Law no. 223/91

MINUTES OF A JOINT REVIEW AT A PUBLIC VENUE

This 13^th day of May 2009, at 2:30 p.m., at the offices of the Agenzia Regionale per l’Istruzione, la Formazione e il Lavoro della Lombardia (Lombardy’s Regional Agency for Education, Training and Employment), in the presence of Mr. Carlo Alberto Balzarini, in his capacity as representative of Regione Lombardia, the following parties met:

For CELL THERAPEUTICS INC	Christina Waters and Luca Morelli
For Assolombarda	Stefania Cerioni
For FILCEM CGIL	Giancarlo Lombardo
For the RSU (Works Council)	Paolo Pavesi, Paola Nicoli, and Rosanna Cavagnoli

WHEREAS

• On 27^th February 2009, Assolombarda, on behalf of Cell Therapeutics Inc., started the procedure under Articles 4 and 24 of Law no. 223/91 for the collective dismissal of all of the 56 employees working at the production site of Bresso (Milan);

• Such procedure was necessary for the reasons explained in the notice of commencement of said procedure;

• During the course of the meetings with the Trade Unions no agreement was reached;

• On 14^th April 2009, Assolombarda, on behalf of the Company, gave to the Regional Agency for Education, Training, and Employment notice of the failure to reach an agreement; and

• The Regional Agency for Education, Training, and Employment has convened the parties today

NOW, THEREFORE,

The Company’s representative summarises the reasons that led the Company to start the procedure on 27^th February 2009.

The Company’s representative declares that, on today’s date, an agreement has been executed, which is attached hereto and forms an integral part hereof, whereby the parties have agreed as follows:

• To implement the procedura di mobilità involving a maximum of 56 employees; the agreement sets out the criteria of selection of the personnel to be involved in the procedure and defines the departure from Art. 8, paragraph 4, of Law no. 236/93, fixing 17^th May 2010 as the deadline;

• To implement the CIGS procedure due to company’s crisis arising from the total closing down of business, pursuant to Art. 1 of Law no. 223/91 and Art. 2 of Ministerial Decree no. 31826/02, involving a maximum of 56 employees, effective from 18^th May 2009, for a term of 12 months, with the implementation of a plan to handle redundancies; and

• To exclude rotation with regard to the employees involved in the CIGS procedure.

The Company shall advance the CIGS compensation at the ordinary due dates.

The representative of the Trade Unions and the RSU (Works Council) confirm the above and agree to consider the procedure started by Cell Therapeutics Inc. on 27^th February 2009 as successfully carried out and completed, and declare that they have completed, with the execution of these minutes, the consultation procedure for the purpose of implementing the CIGS procedure due to company’s crisis arising from the total closing down of business, pursuant to Art. 1 of Law no. 223/91 and Art. 2 of Ministerial Decree no. 31826/02, with regard to a maximum of 56 employees, effective from 18^th May 2009, for a term of 12 months.

After having heard the parties and having acknowledged the agreement dated 13th May 2009, the representative of Regione Lombardia declares the procedure started by Cell Therapeutics on 27^th February 2009 duly carried out and successfully completed and, at the same time, declares the joint review under Art. 5 of Law no. 164/75 and Art. 2 of Presidential Decree no. 218 of 10^th June 2000, duly carried out and

successfully completed, which review was aimed at requesting the implementation of the CIGS procedure due to company’s crisis arising from the total closing down of business, pursuant to Art. 1 of Law no. 223/91 and Art. 2 of Ministerial Decree no. 31826/02, with regard to a maximum of 56 employees, effective from 18th May 2009, for a term of 12 months.

Read, confirmed, and executed.

CELL THERAPEUTICS, INC.

/s/ Christina Ann Waters

Christina Ann Waters

President, Cell Therapeutics Europe (CTE)

/s/ Luca Morelli

Luca Morelli

Legal Representative

ASSOLOMBARDA

/s/ Stefania Cerioni

Stefania Cerioni

CTI Bresso Employee and

CTI’s Union Representative

FILCEM CGIL

/s/ Giancarlo Lombardo

Giancarlo Lombardo

Head of Non-Manager Union

RSU (WORKS COUNCIL)

/s/ Paolo Pavesi

Paolo Pavesi

CTI Bresso Employee and

Employee Representative to Union

/s/ Paola Nicoli

Paola Nicoli

CTI Bresso Employee and

Employee Representative to Union

/s/ Rosanna Cavagnoli

Rosanna Cavagnoli

CTI Bresso Employee and

Employee Representative to Union

REGIONE LOMBARDIA

/s/ Carlo Alberto Balzarini

Carlo Alberto Balzarini

Representative of Regione Lombardia

This 13^th day of May 2009, in Milan,

Between CELL THERAPEUTICS INC, represented by:

CHRISTINA WATERS and LUCA MORELLI

and FILCEM-CGIL, represented by Mr.

GIANCARLO LOMBARDO

with the participation of the RSU (Works Council)

Whereas

• On 27^th February 2009, the Company started, through Assolombarda, the procedure under Articles 4 and 24 of Law no. 223/91 for the collective dismissal of all of the 56 employees working at the Bresso branch due to the definitive and total closing down of the business;

• During the meetings held between the Parties, in compliance with the provisions set forth in Art. 4, paragraph 5, of Law no. 223/1991, the reasons for such measure were thoroughly examined, as detailed in the notice of commencement of the procedure, the content of which must be deemed as if entirely transcribed herein;

• In such context, the Parties examined the advisability of implementing the CIGS procedure (among other reasons) to facilitate the start-up, if any, of a business to safeguard the company activities and consequently offer re-employment opportunities;

• Today the Parties have signed an agreement concerning the management of the employees declared redundant

Now, therefore, the Parties hereby agree as follows:

1. The recitals form an essential and integral part of this agreement.

2. The employees involved in the procedura di mobilità, who accept the termination of their employment relationships, shall be paid, as an incentive to termination, an amount equal to 6 monthly instalments of the applicable gross CIGS ceiling.

3. The employees resigning during the CIGS period without having achieved the prerequisites for retirement will be paid, as an incentive to termination, an amount equal to 12 monthly instalments of the applicable gross CIGS ceiling, together with the indemnity in lieu of notice.

4. The amount referred to under point 2 above shall be increased by 3 additional monthly instalments of the applicable gross CIGS ceiling if, on 31^st July 2009, the conditions for the continuation of the business activity suitable to permit the re-employment of the redundant personnel, through the raising of funds and the set-up of a suitable corporate vehicle, are not fulfilled.

5. The amounts provided for hereunder shall be paid against the employees’ waiver of their right to challenge the dismissal and any other claims deriving, directly and/or indirectly, from their employment relationships and their termination, exclusively after the execution of ad hoc individual verbali di conciliazione (settlement agreements) with the Trade Unions pursuant to articles 411 et seq. of the Italian Code of Civil Procedure and article 2113 of the Italian Civil Code. The aforesaid amount shall be paid together with the termination indemnities and the TFR (severance pay) within 30 days from the date of termination of employment.

6. The Company shall advance the statutory amounts due from the INPS to the employees involved in the CIGS procedure, on the ordinary pay dates.

7. The Company shall inform the RSU (Works Council) of the plan of employment of the employees in the CIGS period, during the course of the business closing down operations.

8. A member of the RSU, as the active party to the aforesaid working processes, will be in attendance during the course of the operations relating to the closing down of the business connected with the laboratories, involving the employees.

9. Upon the express request of any of the employees involved, the Company shall pay, as a personal loan bearing no interest, a net monthly amount equal to 600.00 Euros for a maximum term of 10 months. Upon payment of the termination indemnities, the aforesaid amounts shall be deducted from the net amounts due to the employee.

Read, confirmed, and executed.

CELL THERAPEUTICS, INC.

/s/ Christina Ann Waters

Christina Ann Waters

President, Cell Therapeutics

Europe (CTE)

/s/ Luca Morelli

Luca Morelli

Legal Representative

FILCEM CGIL

/s/ Giancarlo Lombardo

Giancarlo Lombardo

Head of Non-Manager Union

RSU (WORKS COUNCIL)

/s/ Paolo Pavesi

Paolo Pavesi

CTI Bresso Employee and Employee Representative to Union

/s/ Paola Nicoli

Paola Nicoli

CTI Bresso Employee and Employee Representative to Union

/s/ Rosanna Cavagnoli

Rosanna Cavagnoli

CTI Bresso Employee and Employee Representative to Union

AGREEMENT

This 13^th day of May 2009,

Between CELL THERAPEUTICS INC, represented by CHRISTINA WATERS and LUCA MORELLI, assisted by Assolombarda, represented by STEFANIA CERIONI

and FILCEM-CGIL, represented by Mr.

GIANCARLO LOMBARDO

with the participation of the RSU (Works Council)

Whereas

• On 27^th February 2009, the Company started, through Assolombarda, the procedure under Articles 4 and 24 of Law no. 223/91 for the collective dismissal of all of the 56 employees working at the Bresso branch due to the definitive and total closing down of the business;

• During the meetings held between the Parties, in compliance with the provisions set forth in Art. 4, paragraph 5, of Law no. 223/1991, the reasons for such measure were thoroughly examined, as detailed in the notice of commencement of the procedure, the content of which must be deemed as if entirely transcribed herein;

• In such context, the Parties examined the advisability of implementing the CIGS procedure (among other reasons) to facilitate the start-up, if any, of a business to safeguard the company activities and consequently offer re-employment opportunities

Now, therefore, the Parties hereby agree as follows:

1. The recitals form an essential and integral part of this agreement.

2. The closing down of the business referred to in the recitals will result in all the employees of the Bresso branch being redundant and, as a consequence, the Company will place 56 employees in mobility.

3. In order to facilitate the procedure referred to in the recitals, and as an alternative to the immediate implementation of the mobility plan referred to in the company notice dated 27^th February 2009, the Parties hereby agree to implement the CIGS procedure due to the closing down of the business, pursuant to Ministerial Decree dated 18^th December 2002, effective from 18^th May 2009, for a total of 12 months. The 56 employees will be suspended based on the technical and organisational needs connected with the closing down of the business and the necessary consequent interventions. For the grounds connected with the reasons for implementing the CIGS procedure, as detailed herein, the Parties acknowledge that there do not exist the conditions for the rotation of the personnel involved in the suspension, it being a closing down of business.

During the aforesaid period, the Company will implement a plan to deal with the redundant personnel, which will be aimed at reducing the number of redundancies, through the following means:

a) Retirements;

b) Dismissals agreed upon and encouraged through the payment of incentives in the amount and at the conditions set out in a separate agreement to be executed on the same date;

c) Placement in mobility, effective from 18^th May 2009, for the 12 months’ term of the CIGS procedure, with regard to those employees who will not oppose their dismissal and with regard to those who will meet the retirement requisites during the term of their being placed in mobility. In this respect, the Parties therefore intend to postpone to 17^th May 2010 the time frame of 120 days under Art. 8, paragraph IV, of Law No. 236/93;

d) Outplacement through the Province of Milan pursuant to Law no. 266/2005 without charges to be borne by the Company.

4. In the month of September 2009, a meeting will be held to check the progress of the divestment process and the relevant employment effects.

5. At the end of the 12 months’ term of the CIGS procedure, subject to the fulfilment of the ordinary formalities, the Company will place in mobility the remaining redundant employees, if any, as a result of the total divestment of the Bresso branch. The Parties hereby mutually acknowledge that these employees will receive compensation in the amount and at the conditions set out in a separate agreement to be executed on the same date.

The Parties hereby mutually acknowledge that in the relevant institutional venues they will carry out and complete the statutory procedures (mobility and CIGS) for the purpose of implementing this agreement.

Read, confirmed, and executed.

CELL THERAPEUTICS, INC.

/s/ Christina Ann Waters

Christina Ann Waters

President, Cell Therapeutics

Europe (CTE)

/s/ Luca Morelli

Luca Morelli

Legal Representative

ASSOLOMBARDA

/s/ Stefania Cerioni

Stefania Cerioni

CTI Bresso Employee and CTI’s Union Representative

FILCEM CGIL

/s/ Giancarlo Lombardo

Giancarlo Lombardo

Head of Non-Manager Union

RSU (WORKS COUNCIL)

/s/ Paolo Pavesi

Paolo Pavesi

CTI Bresso Employee and

Employee Representative to Union

/s/ Paola Nicoli

Paola Nicoli

CTI Bresso Employee and

Employee Representative to Union

/s/ Rosanna Cavagnoli

Rosanna Cavagnoli

CTI Bresso Employee and

Employee Representative to Union