GRACO INC — Director's Dealing 2007

Aug 3, 2007

SEC Form 3 — Initial Statement of Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2007-08-01

Reporting Person: Zumbolo Brian J (Vice President and General Mgr)

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	2528	Direct

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Non-Qualified Stock Option (right to buy)	$27.91	2014-02-19	Common Stock (1124)		Direct
Non-Qualified Stock Option (right to buy)	$32.95	2014-09-23	Common Stock (300)		Direct
Non-Qualified Stock Option (right to buy)	$40.68	2016-02-17	Common Stock (5000)		Direct
Non-Qualified Stock Option (right to buy)	$41.36	2017-02-16	Common Stock (2500)		Direct

Footnotes

F1: Included in the amount reported are shares acquired under Graco Employee Stock Purchase Plan, exempt under Rule 16b-3.

F2: 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.

F3: Employee stock option granted pursuant to the Graco Inc. 1999 Employee Stock Incentive Plan prior to the Insider becoming an executive officer. The stock option becomes exercisable three years after the date of the grant.

F4: Employee stock option granted pursuant to the Graco Inc. 1999 Employee Stock Incentive Plan prior to the Insider becoming an executive officer. The stock option becomes exercisable in four equal annual installments, commencing one year after the date of the grant.

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