Hacienda Luisita Compromise Agreement

Published on August 7, 2010

This is a copy, which Sentra emailed to Bulatlat, of the compromise agreement between Hacienda Luisita Inc. and the farm workers.

COMPROMISE AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Compromise Agreement entered into by and between:

HACIENDA LUISITA INCORPORATED, a corporation organized and existing under Philippine laws, with office address at JCS Building, 119 dela Rosa cor Palanca Streets, Makati City, duly represented herein by its Corporate Secretary, ATTY. EUFROCINIO C. DELA MERCED JR., and hereinafter referred to as “HLI”;

ALYANSA NG MGA MANGAGAGAWANG BUKID NG HACIENDA LUISITA, duly represented herein by its President, NOEL MALLARI, and hereinafter referred to as “AMBALA”;

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UNITED LUISITA WORKERS UNION, duly represented herein by its Vice-President, ELDIFONSO PINGOL, and hereinafter referred to as “ULWU”; and

SUPERVISORY GROUP OF HACIENDA LUISITA, INC., duly represented herein by JULIO SUNIGA and WINDSOR ANDAYA, and hereinafter referred to as “SUPERVISORY GROUP”

WITNESSETH: That

WHEREAS, on May 11, 1989, a tri-party Memorandum of Agreement (“MOA”, for brevity) was executed by Tarlac Development Corporation (“TDC” for brevity), HLI, and Ninety-Two point Nine percent (92.9%) of the farmworkers, wherein said parties opted to avail of the stock distribution, instead of the land distribution option, as their mode of compliance with the Comprehensive Agrarian Reform Program law (“CARP” for brevity).

WHEREAS, on November 21, 1989, the Presidential Agrarian Reform Council (“PARC”, for brevity) unanimously approved the MOA;

WHEREAS, pursuant to term number 3 of said MOA, HLI distributed 118,377,755 shares of its stocks to the farmworkers for free, equivalent to 33.296% of HLI’s outstanding capital stock;

WHEREAS, pursuant to term number 6 of said MOA, HLI subdivided and distributed allocated residential home lots of 240 sq.m. to each of the families of farmworkers with an aggregate value of One Billion Six Million Eight Hundred Seventy-Seven Thousand Five Hundred Forty Pesos (PHP1,006,877,540.00);

WHEREAS, pursuant to term number 4 of said MOA, HLI distributed to all farmworkers an amount equivalent to three percent (3%) of the total gross sales from the production of the agricultural land;

WHEREAS, on 2004, AMBALA, United Luisita Workers Union and SUPERVISORY GROUP separately filed a complaint before the Department of Agrarian Reform (“DAR”, for brevity) praying for the revocation of the existing MOA, and asking for the distribution of agricultural lands in accordance with CARP law;

WHEREAS, on December 22, 2005, PARC issued Resolution No. 2005-32-02 recalling/revoking the stock distribution agreement contained in the above-mentioned MOA;

WHEREAS, on February 1, 2006, HLI questioned aforesaid PARC resolution before the Supreme Court, under Case No. 171101, and the Court issued a Temporary Restraining Order pending resolution of the petition;

WHEREAS, the parties herein are the same parties in the afore-cited Supreme Court case;

WHEREAS, stock distribution was chosen over land distribution by the farmworkers as early as 1989, and it remains effective and valid until today;

WHEREAS, the primordial concern of the parties herein is to uplift the lives of the people living in Hacienda Luisita, and an early resolution of the case, as well as all collateral issues, will definitely augur well to serve this purpose;

WHEREAS, to achieve an early resolution of all pending issues surrounding Hacienda Luisita, all parties herein are willing to enter into a compromise agreement that would end all disputes;

NOW, THEREFORE, in view of the premises, the parties herein hereto agree on the following terms:

The parties shall respect the individual decisions of the farmworkers as to whether they would stay with the Stock Distribution contained in the MOA of 1989, or would proceed with land distribution.

Farmwokers opting for land distribution shall return to TDC, being the original owners, all HLI shares given to them pursuant to the MOA. In lieu thereof, land shall be given to them FOR FREE AND CLEAN OF ANY AND ALL LIEN OR ENCUMBRANCES. Whatever is the total percentage shareholdings in HLI of the farmworkers opting for land distribution shall be the equivalent percentage of the size of the land to be given to them from the remaining HLI land actually devoted to agriculture, with a total area of 4,102 hectares, approximately. The MOA shall remain valid and effective as far as farmworkers who decide to stay with the Stock Distribution Option.

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