GRACO INC — Director's Dealing 2010

Dec 3, 2010

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2010-12-01

Reporting Person: GILLIGAN J KEVIN (Director)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2010-12-01	Common Stock	M	4010	$11.71	Acquired	4010	Direct
2010-12-01	Common Stock	M	2740	$11.71	Acquired	6750	Direct
2010-12-01	Common Stock	M	5625	$12.18	Acquired	12375	Direct
2010-12-01	Common Stock	S	4010	$36.9103	Disposed	8365	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2010-12-01	Non-Qualified Stock Option (right to buy)	$11.71	M	4010	Disposed	2011-02-23	Common Stock (4010)	Direct
2010-12-01	Non-Qualified Stock Option (right to buy)	$11.71	M	2740	Disposed	2011-02-23	Common Stock (2740)	Direct
2010-12-01	Non-Qualified Stock Option (right to buy)	$12.18	M	5625	Disposed	2011-05-01	Common Stock (5625)	Direct

Footnotes

F1: The price reported in Column 4 is a weighted average price. These shares were sold in multiple transactions at prices ranging from $36.86 to $36.96, inclusive. The reporting person undertakes to provide Graco Inc., any security holder of Graco Inc. or the staff of the Securities and Exchange Commission, upon request, full information regarding the number of shares sold at each separate price within the range set forth in the footnote.

F2: Nonemployee director 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.