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if you got the money to give him a lump sum go for it. you can probably work it so that he gets less if he takes the lump sum - because he will be putting the business in a bad position ie cash strapped - "depriving the business of cash that could be used for xyz". plus there is the time value of money.
but if you pay out him out monthly - you might be responsible for paying a little interest - if he is smart enough to ask - that interest might also come in the form of him expecting more of a payout because he is having to wait to get his money... essentially he is still an owner of the company and could put a lien on the business til you have paid him off.
don't you have anyting in writing regarding what would happen if the company ever dissolved?
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