GRACO INC — Director's Dealing 2006

Jan 4, 2006

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2005-11-02

Reporting Person: RAUENHORST MARK H (Director)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2006-01-01	Common Stock	A	323	$36.48	Acquired	4555.34	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2005-11-02	Phantom Stock Units	$0	J	30.018	Acquired		Common Stock (30.018)	Direct

Footnotes

F1: Shares of Graco common stock recieved in lieu of retainer and meeting fees, issued under the Graco Inc. Stock Incentive Plan.

F2: Dividends on the accrued phantom stock units were credited under the Graco Inc. Stock Incentive Plan and are to be settled 100% in Graco common stock in a lump sum or installments upon reporting person's termination of service on the Board.