Contractor and developer Rok has paid a former director £1.25m in a dispute over bonus payments.

The out-of-court settlement came after former director and biggest shareholder Mark Kay issued ROK with a writ in August last year claiming that he was owed more than £5m in bonuses for 2002 and 2003.

Rok said it had paid Kay, who resigned as a director in October 2004, £815,000 in full and final settlement of legal proceedings, plus interest, legal fees and termination of his contract, which amounted to £1.25m.

Rok said last August that it would “vigorously contest” Kay’s claim, but in a statement last Friday chairman Stephen Pettit said the company had made the settlement to put the matter behind it.

“It is the view of the board of Rok that it is in shareholders’ best interests to avoid the potential for a lengthy and costly court case and diversion of management resources,” he said.