GRACO INC — Director's Dealing 2008

Jun 16, 2008

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2008-06-12

Reporting Person: JOHNSON DALE D (VICE PRESIDENT)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2008-06-12	Common Stock	M	11562	$9.09	Acquired	22220	Direct
2008-06-12	Common Stock	S	5000	$39.85	Disposed	17220	Direct
2008-06-12	Common Stock	S	700	$39.83	Disposed	16520	Direct
2008-06-12	Common Stock	S	4300	$39.8	Disposed	12220	Direct
2008-06-12	Common Stock	S	415	$39.76	Disposed	11805	Direct
2008-06-12	Common Stock	S	800	$39.77	Disposed	11005	Direct
2008-06-12	Common Stock	S	3700	$39.75	Disposed	7305	Direct
2008-06-12	Common Stock	S	85	$39.751	Disposed	7220	Direct
2008-06-12	Common Stock	S	5000	$39.64	Disposed	2220	Direct
2008-06-12	Common Stock	M	8438	$6.37	Acquired	10658	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2008-06-12	Non-Qualified Stock Option (right to buy)	$6.37	M	8438	Disposed	2009-02-22	Common Stock (8438)	Direct
2008-06-12	Non-Qualified Stock Option (right to buy)	$9.09	M	11562	Disposed	2010-02-09	Common Stock (11562)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	2641.0661	Indirect

Footnotes

F1: Included in the amount reported are shares acquired under Graco Inc. 2006 Employee Stock Purchase Plan, exempt under Rule 16b-3.

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.