GRACO INC — Director's Dealing 2006

Mar 17, 2006

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2006-03-15

Reporting Person: KOCH D CHRISTIAN (VICE PRESIDENT)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2006-03-15	Common Stock	M	2812	$11.71	Acquired	10311	Direct
2006-03-15	Common Stock	M	8437	$18.39	Acquired	18748	Direct
2006-03-15	Common Stock	M	11250	$17.34	Acquired	29998	Direct
2006-03-15	Common Stock	F	5841	$41.99	Disposed	24157	Direct
2006-03-16	Common Stock	S	16658	$42.5784	Disposed	7499	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2006-03-15	Non-Qualified Stock Option (right to buy)	$11.71	M	2812	Disposed	2011-02-23	Common Stock (2812)	Direct
2006-03-15	Non-Qualified Stock Option (right to buy)	$17.34	M	11250	Disposed	2013-02-21	Common Stock (11250)	Direct
2006-03-15	Non-Qualified Stock Option (right to buy)	$18.39	M	8437	Disposed	2012-02-22	Common Stock (8437)	Direct

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 one year after the date of the grant.

F3: Employee stock option granted pursuant to the Graco Inc. Stock Incentive Plan in 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.