Memorial Hospital CEO Jim Peak was terminated from his contract late Tuesday during the monthly Hospital Authority board meeting.

Following an executive meeting of the Memorial Hospital and Manor Authority, the board members came back into regular session and the vote was unanimous of those board members present, to terminate Peak’s employment contract effective immediately. Board member Mary Breedlove was not present during that portion of the meeting, and therefore did not vote.

Board President Joe Livingston told The Post-Searchlight that the board annually assesses the CEO performance. This year, the decision was made to terminate the contract following the assessment.

Board member Charles Tyson said the termination was without cause, and no specific reason was cited.

“He was up for his annual review, and that was what precipitated the conversation,” Tyson said.

Livingston further elaborated: “The board was not comfortable with the finances of the hospital, and the board was not comfortable with the morale. We felt we had to take action and quickly.”

Livingston said Peak had requested early retirement effective Dec. 31, 2011.

“The board felt we couldn’t wait that long. The board felt we needed to make a change,” said Livingston, who said he spoke on behalf of the other board members.

Peak’s current annual salary was $187,928, which was increased in January 2008 from $178,984. His contract calls for him to receive $250,000 in severance pay—plus an additional $10,119.20 for accrued unused vacation and sick leave—since his contract was terminated prior to the expiration date, but the board felt it couldn’t wait for another year to take action.

“The board became increasingly disappointed with the financial situation with the hospital. The board felt a change was needed, and it needed to be an immediate change,” Livingston said.

Peak’s employment contract, entered into Jan. 1, 2003, specified a contract term of three years at an annual salary of $165,484.80, with fringe benefits and perks that included usual insurance, and extended to payment of association and club dues and a car allowance.

The termination clause of the contract states, “The board may terminate CEO’s employment under this contract without cause at any time. Such action shall require a majority vote of the entire Board and shall become effective when the vote is taken. After such termination, all rights, duties and obligations of both parties shall cease except as follows: a) Hospital shall continue to pay CEO his then monthly salary for the month in which his duties were terminated and for a number of consecutive months thereafter, computed as follows: Six months plus one month for each full year of service rendered, beginning with the date of employment, up to a maximum of eighteen months. However, notwithstanding the preceding sentence, in no event shall said payments exceed $250,000. b) CEO shall be entitled to paid annual leave and extended illness benefits pursuant to whatever policy is in effect for Hospital employees at the time of termination.”

The contract further states “In the event CEO accepts other employment while Hospital is making said payments to CEO, Hospital shall be entitled to reduce its payments to CEO by the amount of the payments to CEO from such other employment.”

Even though the contract was specified for a three-year period, it allowed for automatic renewals of one year, so that at all times CEO continued to be operating under a three-year contract term unless the hospital notified the CEO on or before the first day of December of any year that such renewal shall not take place.

A prepared statement from Glennie Bench, chair of the Finance Committee, says: “At the November 16, 2010, meeting of the Hospital Authority, board members voted to terminate the employment contract with Chief Executive Officer Jim Peak effective immediately. Authority members would like to think Mr. Peak for his many years of service to Memorial Hospital and Manor and recognize his dedication to the hospital and his standing in the hospital community.”

“We’d like to thank Jim for all he has done for the hospital over the years and we wish him all the best in the future,” Livingston said in the prepared statement.

Bench and Tyson will serve as chairmen of the search committee. The Hospital Authority board will serve as the search committee.

Chief Financial Officer Billy Walker and Director of Nursing Cynthia Vickers were named interim co-CEOs.

Peak currently serves as chairman of the Georgia Alliance of Community Hospitals. He is a former trustee and chairman of the board for the Georgia Hospital Association and served as chairman of the Council for Rural Hospitals.

He was appointed in 2009 by Gov. Sonny Perdue to the Georgia Board for Physicians Workforce and by the Speaker of the Georgia House to the Georgia Public Health Commission. He is a board member of the Georgia Alliance of Community Hospitals, member of the Rotary Club and the Decatur County School Board Foundation and previously served as a member of the Health Strategies Council for the State of Georgia.

During his tenure with Memorial Hospital, the hospital and manor received the Georgia Hospital Community Association award as Small Hospital of the Year in 2004 and 2008, and was runner up in 2007.

In 2008 it received the Community Leadership Award from the Georgia Hospital Association for its sponsorship of “Team Lean,” an innovative community weight-loss competition.

Peak earned a bachelor’s degree from the University of Kentucky and a master’s degree from Georgia Southern University. He and his wife, Bettie, have two sons.

Carol P. Heard, managing editor, contributed to this report.