Hacienda Luisita, originally owned by Compania General de Tabacos de Filipinas (Tabacalera), is a 6,443

hectare parcel of land. The Spanish owners of Tabacalera sold the Hacienda and its sugar mill, Central
Azucarera de Tarlac to Tarlac Development Corporation (Tadeco), owned and controlled by Jose
Cojuangco, Sr. Group.
The government facilitated the transaction and assisted Tadeco in raising the necessary funds on the
condition that the Hacienda Luisita lots shall be subdivided and sold at cost to the tenants whenever
conditions should exist warranting such action under the provisions of the Land Tenure Act. Tadeco
failed to comply with the condition.
On 1980, the Marcos administration filed against Tadeco, et al., to surrender the Hacienda to the then
Ministry of Agrarian Reform (MAR) so that the land can be distributed to farmers at cost. Tadeco,
however, alleged that the Hacienda does not have tenants.
Regional Trial Court rendered judgment in favor of the MAR. Therefrom, Tadeco elevated the case to the
Court of Appeals (CA).
Corazon Aquino became the President and during her tenure, she issued Proclamation No. 131, which a
comprehensive agrarian reform program (CARP) to cover all agricultural lands, and EO No. 229, which
created the Presidential Agrarian Reform Council (PARC) tasked with the formulation of all policies, rules
and regulations necessary for the implementation of CARP. Later, R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect.
Thereafter, the OSG moved to withdraw the case. The CA dismissed the case, subject the PARCs
approval and the implementation of the proposed stock distribution plan (SDP) of Tadeco.
Tadeco organized a spin-off corporation, Hacienda Luisita, Inc. (HLI), on 1988, as a vehicle to facilitate
stock acquisition by the farmworkers. It assigned and conveyed to HLI the agricultural land portion and
other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock.
On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) signified their acceptance of
the proposed HLIs Stock Distribution Option Plan (SDOP).
On May 11, 1989, the Stock Distribution Option Agreement (SDOA), styled as a Memorandum of
Agreement (MOA), was entered into by Tadeco, HLI, and the 5,848 qualified FWBs, and attested to by
the DAR Secretary. The SDOA embodied the basis and mechanics of the SDP, and it was eventually
approved by PARC.
Under the SDOA, part of the distribution plan includes: (a) production-sharing equivalent to three
percent (3%) of gross sales from the production payable to the in cash dividends or incentive bonus; and
(b) distribution of free home lots of not more than 240 square meters each to family-beneficiaries.
The DAR conducted a referendum among the farmworkers. 5,117 out of the 5,315 FWBs opted to
receive shares in HLI. As a result, the PARC approved HLIs SDP on November 21, 1989.
On August 15, 1995, HLI filed an application for the conversion of 500 hectares of the Hacienda from
agricultural to industrial use pursuant to Sec. 65 of R.A. 6657.
Subject to payment of 3% of the gross selling price to FWBs and to HLIs continued compliance under
SDP, the DAR approved the application.