9. STOCK-BASED COMPENSATION
In 2006, we adopted SFAS No. 123(R), “Share-Based Payment.” This statement requires us to expense the fair value of grants of various stock-based compensation programs over the vesting period of the awards. We used the “Modified Prospective Application” transition method whereby we did not restate prior year financial statements. Compensation expense is calculated and recorded beginning in 2006 as follows:
     Awards Granted After November 30, 2005 – Awards are calculated at their fair value at date of grant. The resulting compensation expense is recorded in the income statement ratably over the shorter of the period until vesting or the employee’s retirement eligibility date. For employees eligible for retirement on the date of grant, compensation expense is recorded immediately.
     Awards Granted Prior to November 30, 2005 – Awards were calculated at their fair value at the date of original grant. Compensation expense for the unvested portion of these options at December 1, 2005 is recorded in the income statement ratably over the remaining vesting period without regard to the employee’s retirement eligibility. Upon retirement, any unrecorded compensation expense will be recorded immediately.
     For all grants, the amount of compensation expense to be recorded is adjusted for an estimated forfeiture rate which is based on historical data.
     The table below presents the impact of stock-based compensation expense for 2007 and 2006. Only nominal amounts of stock-based compensation expense were charged against income in 2005 as we applied the provisions of APB No. 25 to this period.

    The stock-based compensation expense recorded in restructuring charges was for the acceleration of vesting in accordance with the provisions of the award for employees who were part of our severance charges (see note 3).
     Total unrecognized stock-based compensation expense at November 30, 2007 and 2006 was $11.6 million and $19.5 million, respectively, and the weighted-average period over which these will be recognized are 1.1 years and 1.3 years, respectively.
     SFAS No. 123(R) also requires that the tax benefit from the exercise of options in excess of the tax benefit from the compensation expense recorded for those options be included in the cash flow statement as a cash inflow from financing activities. In 2005, these tax benefits had been reflected as a cash inflow from operations. The 2005 cash flow statement has not been restated. This excess tax benefit was $9.4 million, $9.5 million and $13.8 million for 2007, 2006 and 2005, respectively.
     We have two types of stock-based compensation awards: restricted stock units (RSUs) and stock options, including grants under an employee stock purchase plan (ESPP). Below, we have summarized the key terms and methods of valuation for our stock-based compensation awards:

RSUs
RSUs are valued at the market price of the underlying stock on the date of grant. Substantially all of the RSUs vest over a two-year term and are expensed ratably over that period, subject to the retirement eligibility rules discussed above.

Stock Options
ESPP – We have an ESPP which enables employees to purchase McCormick common stock non-voting at the lower of the stock price at the grant date or purchase date. This plan has a two-year term and is expensed ratably over the life of the grant. Historically, we have adopted a new ESPP upon the expiration of an existing plan. The last plan was offered in May 2007.
     We value our ESPP using the Black-Scholes option pricing model which uses the assumptions shown in the table