GRACO INC — Director's Dealing 2008

Feb 22, 2008

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2008-02-20

Reporting Person: LOWE DAVID M (Vice President)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2008-02-20	Common Stock	M	11875	$8.74	Acquired	88013	Direct
2008-02-20	Common Stock	S	1593	$36.4401	Disposed	86420	Direct
2008-02-20	Common Stock	S	700	$36.44	Disposed	85720	Direct
2008-02-20	Common Stock	S	200	$36.42	Disposed	85520	Direct
2008-02-20	Common Stock	S	200	$36.43	Disposed	85320	Direct
2008-02-20	Common Stock	M	2693	$8.74	Acquired	88013	Direct
2008-02-21	Common Stock	M	2307	$8.74	Acquired	90320	Direct
2008-02-21	Common Stock	S	2307	$36.76	Disposed	88013	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2008-02-20	Non-Qualified Stock Option (right to buy)	$8.74	M	11875	Disposed	2008-02-27	Common Stock (11875)	Direct
2008-02-20	Non-Qualified Stock Option (right to buy)	$8.74	M	2693	Disposed	2008-02-27	Common Stock (2693)	Direct
2008-02-21	Non-Qualified Stock Option (right to buy)	$8.74	M	2307	Disposed	2008-02-27	Common Stock (2307)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	363.9764	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 two years after the date of the grant.

F2: No consideration was paid for this option.