GRACO INC — Director's Dealing 2007

Feb 20, 2007

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2007-02-16

Reporting Person: LOWE DAVID M (Vice President)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2007-02-16	Non-Qualified Stock Option (right to buy)	$41.36	A	22500	Acquired	2017-02-16	Common Stock (22500)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	43548	Direct
Common Stock	357.5215	Indirect

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Non-Qualified Stock Option (right to buy)	$6.15	2007-02-28	Common Stock (50625)	50625	Direct
Non-Qualified Stock Option (right to buy)	$6.37	2009-02-22	Common Stock (25312)	25312	Direct
Non-Qualified Stock Option (right to buy)	$8.74	2008-02-27	Common Stock (16875)	16875	Direct
Non-Qualified Stock Option (right to buy)	$9.09	2010-02-23	Common Stock (25312)	25312	Direct
Non-Qualified Stock Option (right to buy)	$11.71	2011-02-23	Common Stock (16875)	16875	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 (16875)	16875	Direct
Non-Qualified Stock Option (right to buy)	$27.91	2014-02-20	Common Stock (22500)	22500	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

Footnotes

F1: 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.

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 two years after the date of the grant.

F3: 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 one installment, three years after the date of the grant.

F4: Employee 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 one installment, three years after the date of the grant.

F5: 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.