GRACO INC — Director's Dealing 2007

Jun 15, 2007

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2007-06-14

Reporting Person: MCHALE PATRICK J (Director, President and CEO)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-06-14	Non-Qualified Stock Option (right to buy)	$40.53	A	75000	Acquired	2017-06-14	Common Stock (75000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	14961	Direct
Common Stock	1546.666	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Non-Qualified Stock Option (right to buy)	$9.09	2010-02-23	Common Stock (6327)	6327	Direct
Non-Qualified Stock Option (right to buy)	$11.71	2011-02-23	Common Stock (8436)	8436	Direct
Non-Qualified Stock Option (right to buy)	$17.34	2013-02-21	Common Stock (22500)	22500	Direct
Non-Qualified Stock Option (right to buy)	$18.39	2012-02-22	Common Stock (12655)	12655	Direct
Non-Qualified Stock Option (right to buy)	$27.91	2014-02-20	Common Stock (27000)	27000	Direct
Non-Qualified Stock Option (right to buy)	$38.13	2015-02-18	Common Stock (22500)	22500	Direct
Non-Qualified Stock Option (right to buy)	$40.68	2016-02-17	Common Stock (22500)	22500	Direct
Non-Qualified Stock Option (right to buy)	$41.36	2017-02-16	Common Stock (22500)	22500	Direct

Footnotes

F1: 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.

F2: Employee stock option granted pursuant to the Graco Inc. Long-Term 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.

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.

F4: 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.