GRACO INC — Director's Dealing 2012

Feb 8, 2012

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRACO INC (GGG)
CIK: 0000042888
Period of Report: 2012-02-07

Reporting Person: Paulis Simon J (VICE PRESIDENT)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2012-02-07	Common Stock	M	11250	$41.36	Acquired	17251.077	Direct
2012-02-07	Common Stock	M	11250	$40.68	Acquired	28501.077	Direct
2012-02-07	Common Stock	M	3375	$27.91	Acquired	31876.077	Direct
2012-02-07	Common Stock	S	25875	$48.5666	Disposed	6001.077	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2012-02-07	Non-Qualified Stock Option (right to buy)	$27.91	M	3375	Disposed	2014-02-19	Common Stock (3375)	Direct
2012-02-07	Non-Qualified Stock Option (right to buy)	$40.68	M	11250	Disposed	2016-02-17	Common Stock (11250)	Direct
2012-02-07	Non-Qualified Stock Option (right to buy)	$41.36	M	11250	Disposed	2017-02-16	Common Stock (11250)	Direct

Footnotes

F1: The price reported in Column 4 is a weighted average price. The shares were sold in multiple transactions with prices ranging from $48.50 to $48.66, 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, with full information regarding the number of shares sold at each separate price within the range set forth in the footnote.

F2: Included in the amount reported are shares of Graco Common Stock acquired under the Graco Inc. Automatic Dividend Reinvestment Plan (DRIP), exempt under Rule 16a-11, and shares acquired under the Graco Inc. 2006 Employee Stock Purchase Plan, exempt under Rule 16b-3.

F3: Employee 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.

F4: Employee stock option granted pursuant to the Amended and Restated Stock Incentive Plan (2006) in transaction exempt under Section 16b-3. The stock option becomes exercisable in four equal annual installments, commencing one year after the date of the grant.