GRACO INC — Director's Dealing 2006

Feb 22, 2006

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2006-02-17

Reporting Person: RESCORLA CHARLES L (VICE PRESIDENT)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2005-03-01	Common Stock	J	859	$24.74	Acquired	51854	Direct
2005-03-31	Common Stock	J	3.2333	$40.36	Acquired	1710.9323	Indirect
2005-06-30	Common Stock	J	12.011	$31.05	Acquired	1722.9433	Indirect
2005-09-30	Common Stock	J	5.8049	$34.28	Acquired	1728.7482	Indirect
2005-12-31	Common Stock	J	4.3378	$36.48	Acquired	1733.086	Indirect

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2006-02-17	Non-Qualified Stock Option (right to buy)	$40.68	A	22500	Acquired	2016-02-17	Common Stock (22500)	Direct

Footnotes

F1: Shares acquired under Graco Employee Stock Purchase Plan, exempt under Rule 16b-3.

F2: ESOP - Dividends paid pursuant to the Graco Employee Stock Ownership Plan, exempt under Rule 16b-3(c).

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.