GRACO INC — Director's Dealing 2010

Dec 6, 2010

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2010-12-02

Reporting Person: GRANER JAMES A (CFO and TREASURER)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2010-12-02	Common Stock	M	11250	$11.71	Acquired	78140	Direct
2010-12-02	Common Stock	S	8067	$38.25	Disposed	70073	Direct
2010-12-02	Common Stock	S	3183	$38.2502	Disposed	66890	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2010-12-02	Non-Qualified Stock Option (right to buy)	$11.71	M	11250	Disposed	2011-02-23	Common Stock (11250)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	3170.4885	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 one year after the date of the grant.