GRACO INC — Director's Dealing 2008

May 8, 2008

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2008-05-06

Reporting Person: RESCORLA CHARLES L (VICE PRESIDENT)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2008-05-06	Common Stock	S	400	$39.62	Disposed	55811	Direct
2008-05-06	Common Stock	M	12656	$9.09	Acquired	68467	Direct
2008-05-06	Common Stock	S	400	$39.63	Disposed	68067	Direct
2008-05-06	Common Stock	S	800	$39.64	Disposed	67267	Direct
2008-05-06	Common Stock	S	500	$39.66	Disposed	66767	Direct
2008-05-06	Common Stock	S	1956	$39.67	Disposed	64811	Direct
2008-05-06	Common Stock	S	200	$39.68	Disposed	64611	Direct
2008-05-06	Common Stock	S	800	$39.69	Disposed	63811	Direct
2008-05-06	Common Stock	S	700	$39.7	Disposed	63111	Direct
2008-05-06	Common Stock	S	2400	$39.71	Disposed	60711	Direct
2008-05-06	Common Stock	S	700	$39.72	Disposed	60011	Direct
2008-05-06	Common Stock	S	2000	$39.73	Disposed	58011	Direct
2008-05-06	Common Stock	S	300	$39.74	Disposed	57711	Direct
2008-05-06	Common Stock	S	500	$39.76	Disposed	57211	Direct
2008-05-06	Common Stock	S	100	$39.78	Disposed	57111	Direct
2008-05-06	Common Stock	S	900	$39.65	Disposed	56211	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2008-05-06	Non-Qualified Stock Option (right to buy)	$9.09	M	12656	Disposed	2010-02-23	Common Stock (12656)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	1786.8359	Indirect

Footnotes

F1: 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.

F2: No consideration was paid for this option.