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: GRANER JAMES A (CFO and TREASURER)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2005-12-31	Common Stock	J	7.1179	$36.48	Acquired	2843.8577	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	2016-02-27	Common Stock (22500)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	68666	Direct

Footnotes

F1: 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.