GRACO INC — Director's Dealing 2007

Oct 2, 2007

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2007-05-07

Reporting Person: RAUENHORST MARK H (Director)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2007-10-01	Common Stock	A	307	$39.11	Acquired	3145.34	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-05-07	Phantom Stock Units	$0	J	33.253	Acquired		Common Stock (33.253)	Direct
2007-08-06	Phantom Stock Units	$0	J	32.289	Acquired		Common Stock (32.289)	Direct

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Non-Qualified Stock Option (right to buy)	$9.33	2010-09-28	Common Stock (10125)	10125	Direct
Non-Qualified Stock Option (right to buy)	$12.18	2011-05-01	Common Stock (5625)	5625	Direct
Non-Qualified Stock Option (right to buy)	$19.13	2012-05-07	Common Stock (5625)	5625	Direct
Non-Qualified Stock Option (right to buy)	$20.27	2013-05-06	Common Stock (3750)	3750	Direct
Non-Qualified Stock Option (right to buy)	$29.48	2014-04-23	Common Stock (3000)	3000	Direct
Non-Qualified Stock Option (right to buy)	$37.13	2015-04-22	Common Stock (3600)	3600	Direct
Non-Qualified Stock Option (right to buy)	$40.66	2017-04-20	Common Stock (3600)	3600	Direct
Non-Qualified Stock Option (right to buy)	$48.95	2016-04-21	Common Stock (3600)	3600	Direct

Footnotes

F1: Shares of Graco common stock received in lieu of retainer and meeting fees, issued under the Amended and Restated Graco Inc. Stock Incentive Plan (2006).

F2: Dividends on the accrued phantom stock units were credited under the Amended and Restated Graco Inc. Stock Incentive Plan (2006) 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.

F3: Nonemployee director 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.

F4: Nonemployee director stock option granted pursuant to the Graco Inc. 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.

F5: Nonemployee director stock option granted pursuant to the Amended and Restated Graco Inc. Stock Incentive Plan (2006) 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.