GRACO INC — Director's Dealing 2004

Feb 24, 2004

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2004-02-23

Reporting Person: GRANER JAMES A (VICE PRESIDENT AND CONTROLLER)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2004-02-23	Common Stock	M	16875	$9.22	Acquired	53672	Direct
2004-02-23	Common Stock	M	11250	$13.11	Acquired	64922	Direct
2004-02-23	Common Stock	M	11250	$9.55	Acquired	76172	Direct
2004-02-23	Common Stock	M	11250	$13.64	Acquired	87422	Direct
2004-02-23	Common Stock	F	12219	$41.75	Disposed	75203	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2004-02-23	Non-Qualified Stock Option (right to buy)	$9.22	M	16875	Disposed	2007-02-28	Common Stock (16875)	Direct
2004-02-23	Non-Qualified Stock Option (right to buy)	$9.55	M	11250	Disposed	2009-02-22	Common Stock (11250)	Direct
2004-02-23	Non-Qualified Stock Option (right to buy)	$13.11	M	11250	Disposed	2008-02-27	Common Stock (11250)	Direct
2004-02-23	Non-Qualified Stock Option (right to buy)	$13.64	M	11250	Disposed	2010-02-23	Common Stock (11250)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	1764.2883	Indirect

Footnotes

F1: Transaction exempt under Rule 16b-3(e); stock delivered to issuer to cover the exercise price, or stock retained by issuer to cover withholding taxes.

F2: Employee stock option granted pursuant to the Graco Inc. Long-Term Stock Incentive Plan in a transaction exempt under Rule 16b-3. The stock option becomes exercisable in four equal annual installments, commencing two years after the date of the grant.

F3: Employee stock option granted pursuant to the Graco Inc. Long-Term Stock Incentive Plan in a transaction exempt under Rule 16b-3. The stock option becomes exercisable in four equal annual installments, commencing one year after the date of the grant.