8. Fair Value Measurement

The outstanding Phantom Equity (PE) and Phantom Equity Appreciation Rights (PEAR) awards under the Company’s Value Creation Incentive Plan (VCIP; see Note 19) were recorded at fair value using the Black-Scholes option pricing model. There were no PE or PEAR appreciation awards granted during the quarter ended March 28, 2020 or March 30, 2019. The following assumptions were used in determining the fair value of the award liability as of March 28, 2020.


Risk-free interest rate			1.58% - 1.62%
Dividend rate			0.00%
Volatility range			24% - 38%
Weighted average expected term (years)			3.8

The following table is a reconciliation for the PE and PEAR liability measured at fair value using Level 3 unobservable inputs (in thousands):


Balance at December 28, 2019	$	496
Awards related to acquired companies		-
Change due to vesting of awards granted		166
Change in fair value measurement of liability		(52)
Balance at March 28, 2020	$	610

Contingent consideration was recorded at fair value using a Monte Carlo Simulation model. The following assumptions were used in determining the fair value of contingent consideration at March 28, 2020:


Risk-free interest rate			.09% - 1.6%
Expected term (years)			.18 - 2.33

The following table is a reconciliation for the contingent consideration liability measured at fair value using Level 3 unobservable inputs (in thousands):


Balance at December 28, 2019	$	1,482
Contingent consideration granted with acquisitions		-
Change in fair value measurement of liability		120
Balance at March 28, 2020	$	1,602

The ARO liabilities were recorded at fair value using an expected present value technique. The following assumptions were used in determining the fair value of the ARO liabilities at March 28, 2020:


Credit adjusted risk-free interest rate			3.66%
Expected term (years)			4.5