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<SEC-DOCUMENT>0000950123-10-014198.txt : 20100218
<SEC-HEADER>0000950123-10-014198.hdr.sgml : 20100218
<ACCEPTANCE-DATETIME>20100218173008
ACCESSION NUMBER:		0000950123-10-014198
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20091225
FILED AS OF DATE:		20100218
DATE AS OF CHANGE:		20100218

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GRACO INC
		CENTRAL INDEX KEY:			0000042888
		STANDARD INDUSTRIAL CLASSIFICATION:	PUMPS & PUMPING EQUIPMENT [3561]
		IRS NUMBER:				410285640
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1225

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09249
		FILM NUMBER:		10617351

	BUSINESS ADDRESS:	
		STREET 1:		88 11TH AVENUE NE
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55413-1894
		BUSINESS PHONE:		6126236000

	MAIL ADDRESS:	
		STREET 1:		C/O CORPORATION SERVICE COMPANY
		STREET 2:		380 JACKSON STREET, SUITE 700
		CITY:			ST. PAUL
		STATE:			MN
		ZIP:			55101
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>c56397e10vkza.htm
<DESCRIPTION>FORM 10-K/A
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vkza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-K/A</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Amendment No.&nbsp;1</B></DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>Annual Report Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><b>for the fiscal year ended December&nbsp;25, 2009, or</b></TD>
</TR>
</TABLE>
</DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD><B>Transition report pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="font-size:10pt"><b>for the transition period from
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></b>.</TD>
</TR>
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>
Commission File No.&nbsp;001-09249</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Graco Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">
(Exact name of Registrant as specified in its charter)</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Minnesota<BR>
(State or other jurisdiction of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">41-0285640<BR>
(I.R.S. Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>88 &#150;11th Avenue Northeast<BR>
Minneapolis, MN 55413</B><BR>
(Address of principal executive offices) (Zip Code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(612)&nbsp;623-6000</B><BR>
(Registrant&#146;s telephone number, including area code)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(b) of the Act:<BR>
Common Stock, par value $1.00 per share<BR>
Preferred Share Purchase Rights<BR>
Shares registered on the New York Stock Exchange.</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(g) of the Act:<BR>
None</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&nbsp;405 of
the Securities Act. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is not required to file reports pursuant to Section&nbsp;13 or
Section 15(d) of the Act. Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data file required to be submitted and posted
pursuant to Rule&nbsp;405 of Regulation&nbsp;S-T during the preceding 12&nbsp;months (or for such shorter period
that the registrant was required to submit and post such files). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation&nbsp;S-K is
not contained herein, and will not be contained, to the best of registrant&#146;s knowledge, in
definitive proxy or information statements incorporated by reference in Part&nbsp;III of this Form 10-K
or any amendment to this Form 10-K <FONT face="Wingdings">&#254;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definitions of &#147;large accelerated
filer&#148; and &#147;accelerated filer&#148; in Rule&nbsp;12b-2 of the Exchange Act (Check one):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Large accelerated filer <FONT face="Wingdings">&#254;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Accelerated filer <FONT face="Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Non-accelerated filer <FONT face="Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Smaller reporting company <FONT face="Wingdings">&#111;</FONT></FONT></TD>
</TR>

<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%" align="center" nowrap>(Do not check if a smaller reporting company)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined by Rule&nbsp;12b-2 of the
Act).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate market value of approximately 60,000,000 shares of common stock held by
non-affiliates of the registrant was approximately $1.3&nbsp;billion as of June&nbsp;26, 2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">60,080,211 shares of common stock were outstanding as of February&nbsp;8, 2010.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B> DOCUMENTS INCORPORATED BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.</div>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>







<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">Item&nbsp;15</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#101">Exhibits, Financial Statement Schedule</A></TD>
    <TD>&nbsp;</TD>

    <TD align="right" valign="top">3</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#102">Index to Exhibits</A></TD>
    <TD>&nbsp;</TD>

    <TD align="right" valign="top">5</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Amendment No.&nbsp;1 on Form 10-K/A (&#147;Amendment No.&nbsp;1&#148;) to the Graco Inc. Annual Report on
Form 10-K for the year ended December&nbsp;25, 2009, as filed with the Securities and Exchange
Commission on February&nbsp;16, 2010 (the &#147;2009 Annual Report&#148;), is being filed solely for the purpose of
filing Exhibits 10.14, 10.22 and 10.27, which were listed on the Index to Exhibits required by Item
15 of the 2009 Annual Report but were inadvertently not filed as exhibits to the 2009 Annual
Report. This Amendment No.&nbsp;1 does not otherwise update any information as originally filed and
does not otherwise reflect events occurring after the original filing date of our 2009 Annual
Report.
</DIV>

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;15.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Exhibits and Financial Statement Schedule</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(a)&nbsp;The following documents are filed as part of this report:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Management Contract, Compensatory Plan or Arrangement. (See Exhibit&nbsp;Index)
Those entries marked by an asterisk are Management Contracts, Compensatory Plans
or Arrangements.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Signatures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Graco Inc.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/<FONT style="font-variant: SMALL-CAPS">Patrick J. McHale</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;17, 2010</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Patrick J. McHale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">President and Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by
the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/<FONT style="font-variant: SMALL-CAPS">Patrick J. McHale</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;17, 2010</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Patrick J. McHale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">President and Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>(Principal Executive Officer)</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/<FONT style="font-variant: SMALL-CAPS">James A. Graner</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;17, 2010</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James A. Graner</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chief Financial Officer and Treasurer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>(Principal Financial Officer)</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/<FONT style="font-variant: SMALL-CAPS">Caroline M. Chambers</FONT>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">February&nbsp;17, 2010</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Caroline M. Chambers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vice President and Controller</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>(Principal Accounting Officer)</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;Index</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement By and Among PMC Global, Inc. Gusmer Machinery Group, Inc. and
Graco Inc., dated as of February&nbsp;4, 2005 (Incorporated by reference to Exhibit&nbsp;2.1 to the
Company&#146;s Report on Form&nbsp;8-K dated February&nbsp;10, 2005.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Purchase Agreement By and Among PMC Europe Investments, S.L. and Graco Inc. dated
as of February&nbsp;4, 2005. (Incorporated by reference to Exhibit&nbsp;2.2 to the Company&#146;s Report
on Form&nbsp;8-K dated February&nbsp;10, 2005.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Articles of Incorporation as amended June&nbsp;14, 2007. (Incorporated by reference
to Exhibit&nbsp;3.1 to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended June&nbsp;29,
2007.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Bylaws as amended June&nbsp;13, 2002. (Incorporated by reference to Exhibit&nbsp;3 to the
Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended June&nbsp;28, 2002.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Share Rights Agreement dated as of February&nbsp;25, 2000, between the Company and Wells
Fargo, formerly known as Norwest Bank Minnesota, National Association, as Rights Agent.
(Incorporated by reference to Exhibit&nbsp;1 to the Company&#146;s Registration Statement on Form&nbsp;8-A
dated March&nbsp;9, 2000.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Agreement dated July&nbsp;12, 2007, between the Company and U.S. Bank National
Association, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, and Bank of
America, N.A. (Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Report on Form&nbsp;8-K
dated July&nbsp;12, 2007.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Officer Bonus Plan as amended and restated December&nbsp;23,
2008. (Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s
2008 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Officer Annual Incentive Bonus Plan as amended and
restated December&nbsp;23, 2008. (Incorporated by reference to Exhibit
10.2 to the Company&#146;s 2008 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Graco Inc. Nonemployee Director Stock Option Plan, as amended and
restated June&nbsp;18, 2004. (Incorporated by reference to Exhibit&nbsp;10.4
to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended
April&nbsp;1, 2005.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Long Term Stock Incentive Plan, as amended and restated June&nbsp;18,
2004. (Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s
Report on Form&nbsp;10-Q for the thirteen weeks ended April&nbsp;1, 2005.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Graco Inc. Amended and Restated Stock Incentive Plan (2006). (Incorporated by reference to
the Company&#146;s Definitive Proxy Statement on Schedule&nbsp;14A filed March&nbsp;14, 2006.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee Stock Incentive Plan, as amended and restated June&nbsp;18, 2004. (Incorporated by
reference to Exhibit&nbsp;10.3 to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended
April&nbsp;1, 2005.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Deferred Compensation Plan Restated, effective December&nbsp;1, 1992.
(Incorporated by reference to Exhibit&nbsp;2 to the Company&#146;s Report on
Form&nbsp;8-K dated March&nbsp;11, 1993.) First Amendment dated September&nbsp;1,
1996. (Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s
Report on Form&nbsp;10-Q for the twenty-six weeks ended June&nbsp;27, 1997.)
Second Amendment dated May&nbsp;27, 2000. (Incorporated by reference to
Exhibit&nbsp;10.7 to the Company&#146;s 2005 Annual Report on Form&nbsp;10-K.)
Third Amendment adopted on December&nbsp;19, 2002. (Incorporated by
reference to Exhibit&nbsp;10.7 to the Company&#146;s 2005 Annual Report on
Form&nbsp;10-K.) Fourth Amendment adopted June&nbsp;14, 2007. (Incorporated
by reference to Exhibit&nbsp;10.2 to the Company&#146;s Report on Form&nbsp;10-Q
for the thirteen weeks ended June&nbsp;29, 2007.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Deferred Compensation Plan (2005 Statement) as amended and restated
on April&nbsp;4, 2005. (Incorporated by reference to Exhibit&nbsp;10.1 of the
Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended July&nbsp;1,
2005.) Second Amendment dated November&nbsp;1, 2005. (Incorporated by
reference to Exhibit&nbsp;10.8 to the Company&#146;s 2005 Annual Report on
Form&nbsp;10-K.) Third Amendment adopted on December&nbsp;29, 2008.
(Incorporated by reference to Exhibit&nbsp;10.8 to the Company&#146;s 2008
Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CEO Award Program. (Incorporated by reference to Exhibit&nbsp;10.9 to the Company&#146;s 2005 Annual
Report on Form&nbsp;10-K.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retirement Plan for Nonemployee Directors. (Incorporated by
reference to Attachment C to Item&nbsp;5 to the Company&#146;s Report on Form
10-Q for the thirteen weeks ended March&nbsp;29, 1991.) First Amendment
adopted on December&nbsp;29, 2008. (Incorporated by reference to
Exhibit&nbsp;10.10 to the Company&#146;s 2008 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Graco Restoration Plan (2005 Statement). (Incorporated by
reference to Exhibit&nbsp;10.1 to the Company&#146;s Report on Form&nbsp;10-Q for
the thirteen weeks ended September&nbsp;29, 2006.) First Amendment
adopted December&nbsp;8, 2006. (Incorporated by reference to Exhibit
10.12 to the Company&#146;s 2006 Annual Report on Form&nbsp;10-K.) Second
Amendment adopted August&nbsp;15, 2007. (Incorporated by reference to
Exhibit&nbsp;10.1 to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen
weeks ended September&nbsp;28, 2007.) Third Amendment adopted March&nbsp;27,
2008. (Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s
Report on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;28, 2008.)
Fourth Amendment adopted December&nbsp;29, 2008. (Incorporated by
reference to Exhibit&nbsp;10.11 to the Company&#146;s 2008 Annual Report on
Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award of
nonstatutory stock options to nonemployee directors under the
Nonemployee Director Stock Option Plan. (Incorporated by reference
to Exhibit&nbsp;10.11 to the Company&#146;s 2001 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award of
nonstatutory stock options to nonemployee directors under the Graco
Inc. Stock Incentive Plan. (Incorporated by reference to Exhibit
10.22 to the Company&#146;s 2002 Annual Report on Form&nbsp;10-K.) Amended
form of agreement for awards made to nonemployee directors.
(Incorporated by reference to Exhibit&nbsp;10.3 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;26, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award of
nonstatutory stock options to nonemployee directors under the Graco
Inc. Amended and Restated Stock Incentive Plan (2006).
(Incorporated by reference to Exhibit&nbsp;10.3 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended June&nbsp;29, 2007.) Amended
form of agreement for awards made to nonemployee directors in 2008.
(Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended June&nbsp;27, 2008.) Amended
and restated form of agreement for awards made to nonemployee
directors in 2009.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award of
non-incentive stock options to executive officers under the Long
Term Stock Incentive Plan. (Incorporated by reference to Exhibit
10.12 to the Company&#146;s 2001 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award of
non-incentive stock options to executive officers under the Graco
Inc. Stock Incentive Plan. (Incorporated by reference to Exhibit
10.2 to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks
ended March&nbsp;29, 2002.) Amended form of agreement for awards made
to Chief Executive Officer in 2001 and 2002. Amended form of
agreement for awards made to executive officers in 2003.
(Incorporated by reference to Exhibit&nbsp;10.15 of the Company&#146;s 2003
Annual Report on Form&nbsp;10-K.) Amended form of agreement for awards
made to executive officers in 2004. Amended form of agreement for
awards made to Chief Executive Officer in 2004. (Incorporated by
reference to Exhibit&nbsp;10.2 and 10.4 to the Company&#146;s Report on Form
10-Q for the thirteen weeks ended March&nbsp;26, 2004.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award in 2007
of non-incentive stock options to executive officers under the
Graco Inc. Amended and Restated Stock Incentive Plan (2006).
(Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;30, 2007.) Amended
form of agreement for awards made to executive officers in 2008
(Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;28, 2008.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stock Option Agreement. Form of agreement used for award in 2007
of non-incentive stock options to chief executive officer under the
Graco Inc. Amended and Restated Stock Incentive Plan (2006).
(Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Report
on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;30, 2007.) Amended
form of agreement for awards made to chief executive officer in
2008 (Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s
Report on Form&nbsp;10-Q for the thirteen weeks ended March&nbsp;28, 2008.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.19
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Deferred Compensation Agreement. Form of supplementary
agreement entered into by the Company which provides a retirement
benefit to one executive officer, as amended by First Amendment,
effective September&nbsp;1, 1990. (Incorporated by reference to Exhibit
3 to the Company&#146;s Report on Form&nbsp;8-K dated March&nbsp;11, 1993.) As</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">further amended by agreement, effective December&nbsp;4, 2008. (Incorporated by reference to Exhibit&nbsp;10.19 to the
Company&#146;s 2008 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Officer Restricted Stock Agreement. Form of agreement used to award restricted stock to selected executive
officers. (Incorporated by reference to Exhibit&nbsp;10.20 to the Company&#146;s 2007 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Election Form. Form of agreement used for the issuance of stock or deferred stock in lieu of cash payment of retainer
and/or meeting fees to nonemployee directors under the Graco Inc. Stock Incentive Plan. (Incorporated by reference to
Exhibit&nbsp;10.17 to the Company&#146;s 2004 Annual Report on Form&nbsp;10-K.) Amended form of agreement used for the 2006 plan
year. (Incorporated by reference to Exhibit&nbsp;10.4 to the Company&#146;s Report on Form&nbsp;10-Q for the thirteen weeks ended
June&nbsp;29, 2007.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Election Form. Form of agreement used for the 2007 plan year for the issuance of stock or deferred stock in lieu of
cash payment of retainer and/or meeting fees to nonemployee directors under the Graco Inc. Amended and Restated Stock
Incentive Plan (2006). (Incorporated by reference to Exhibit&nbsp;10.5 to the Company&#146;s Report on Form&nbsp;10-Q for the
thirteen weeks ended June&nbsp;29, 2007.) Amended form of agreement used for the 2008 plan year. (Incorporated by
reference to Exhibit&nbsp;10.22 to the Company&#146;s 2007 Annual Report on Form&nbsp;10-K.) Amended form of agreement used for 2009
plan year. (Incorporated by reference to Exhibit&nbsp;10.22 to the Company&#146;s 2008 Annual Report on Form&nbsp;10-K.) Amended
form of agreement used for 2010 plan year.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Key Employee Agreement. Form of agreement used with chief executive officer. (Incorporated by reference to Exhibit
10.24 to the Company&#146;s 2007 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Key Employee Agreement. Form of agreement used with executive officers reporting to the chief executive officer.
(Incorporated by reference to Exhibit&nbsp;10.25 to the Company&#146;s 2007 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Key Employee Agreement. Form of agreement used with executive officer reporting to an executive officer other than the
chief executive officer. (Incorporated by reference to Exhibit&nbsp;10.26 to the Company&#146;s 2007 Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Group Long-Term Disability Policy as revised in 1995. (Incorporated by reference to Exhibit&nbsp;10.23 to the
Company&#146;s 2004 Annual Report on Form&nbsp;10-K.) As enhanced by Supplemental Income Protection Plan in 2004. (Incorporated
by reference to Exhibit&nbsp;10.28 to the Company&#146;s Annual Report on Form&nbsp;10-K.)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to the 2003 through 2006 Nonstatutory Stock Option Agreements of one nonemployee director.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#134;11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Statement of Computation of Earnings per share.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#134;21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#134;23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Independent Registered Public Accounting Firm&#146;s Consent.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#134;24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of President and Chief Executive Officer pursuant to Rule&nbsp;13a-14(a).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of Chief Financial Officer and Treasurer pursuant to Rule&nbsp;13a-14(a).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of President and Chief Executive Officer and Chief Financial Officer and
Treasurer pursuant to Section&nbsp;1350 of Title 18, U.S.C.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#134;99
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cautionary Statement Regarding Forward-Looking Statements.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as otherwise noted, all documents incorporated by reference above relate to File No.
001-09249.
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">

<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">*</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Management Contracts, Compensatory Plans or Arrangements.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#134;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Previously filed with 2009 Annual Report on Form 10-K filed on February&nbsp;16, 2010.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to Item&nbsp;601(b)(4)(iii) of Regulation&nbsp;S-K, copies of certain instruments defining the
rights of holders of certain long-term debt of the Company and its subsidiaries are not filed as
exhibits because the amount of debt authorized under any such instrument does not exceed 10&nbsp;percent
of the total assets of the Company and its subsidiaries. The Company agrees to furnish copies
thereof to the Securities and Exchange Commission upon request.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>2
<FILENAME>c56397exv10w14.htm
<DESCRIPTION>EX-10.14
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w14</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.14
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NONEMPLOYEE DIRECTOR<BR>
AMENDED AND RESTATED STOCK INCENTIVE PLAN (2006)</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>STOCK OPTION AGREEMENT<BR>
(NSO)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS AGREEMENT, </B>made this<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> day of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 200&#95;&#95;&#95;by and between Graco Inc., a Minnesota
corporation (the &#147;Company&#148;) and &#171;NAME&#187; (the &#147;Nonemployee Director&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WITNESSETH THAT:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the Company pursuant to the Graco Inc. Amended and Restated Stock Incentive Plan
(2006) (the &#147;Plan&#148;) wishes to grant this stock option to Nonemployee Director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW THEREFORE</B>, in consideration of the premises and of the mutual covenants herein contained,
the parties agree as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Grant of Option</U></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company grants to Nonemployee Director the right and option (the &#147;Option&#148;) to purchase
all or any part of an aggregate of &#171;Shares&#187; shares of Common Stock of the Company, par value
$1.00 per share, at the price of &#171;Price&#187; per share on the terms and conditions set forth
herein. This is a nonstatutory stock Option which does not qualify for special tax
treatment under Sections&nbsp;421 or 422 of the Internal Revenue
Code. The date of grant is <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;(the
&#147;Date of Grant&#148;)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Duration and Exercisability</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No portion of this Option may be exercised by Nonemployee Director until the
first anniversary of the Date of Grant, and then only in accordance with the Vesting
Schedule set forth below. In no event shall this Option or any portion of this Option
be exercisable following the tenth anniversary of the Date of Grant.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&nbsp;</B></TD>
    <TD width="1%"><B>&nbsp;</B></TD>
    <TD><B>Vesting Schedule</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2">Portion of Option</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Date</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="2" style="border-bottom: 1px solid #000000">Exercisable</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Anniversary of Date of Grant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Second Anniversary of Date of Grant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">50</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Third Anniversary of Date of Grant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">75</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fourth Anniversary of Date of Grant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If Nonemployee Director does not purchase in any one year the full number of shares
of Common Stock of the Company to which he/she is entitled under this Option, he/she
may, subject to the terms and conditions of Section&nbsp;3 hereof, purchase such shares of
Common Stock in any subsequent year during the term of this Option. The Option shall
expire as of the close of trading at the national securities exchange on which the
Common Stock is traded (&#147;Exchange&#148;) on the tenth anniversary of the Date of Grant, or
if the Exchange is closed on</TD>
</TR>

</TABLE>

</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the anniversary date, or the Common Stock of the Company is not trading on said
anniversary date, such earlier business day on which the Common Stock is trading on
the Exchange.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>During the lifetime of Nonemployee Director, the Option shall be exercisable
only by him/her and shall not be assignable or transferable by him/her otherwise than
by will or the laws of descent and distribution.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under no circumstances may the Option granted by this Agreement be exercised
after the term of the Option expires.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Effect of Termination of Membership on the Board</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event Nonemployee Director ceases being a director of the Company for
any reason other than the reasons identified in Section&nbsp;3B below, Nonemployee Director
shall have the right to exercise the Option as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If Nonemployee Director was a member of the Board of Directors of
the Company for five (5)&nbsp;or more years, the portion of the Option not yet
exercisable shall become immediately exercisable upon the date Nonemployee
Director ceases being a director. Nonemployee Director may exercise all or any
portion of the Option not yet exercised for a period beginning on the day after
the date of Nonemployee Director&#146;s ceasing to be a director and ending at the
close of trading on the Exchange on the tenth anniversary of the Date of Grant,
provided that if Nonemployee Director dies during the period between the date of
Nonemployee Director ceasing to be a director and the expiration of the Option,
the executor(s) or administrator(s) of Nonemployee Director&#146;s estate, or any
person(s) to whom the Option was transferred by will or the applicable laws of
distribution and descent may exercise the unexercised portion of the Option at
any time during a period beginning the day after the date of Nonemployee
Director&#146;s death and ending at the close of trading on the Exchange on the
anniversary of death one (1)&nbsp;year later. In no event shall the Option be
exercisable following the tenth anniversary of the Date of Grant.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If Nonemployee Director was a member of the Board of Directors of
the Company for less than five (5)&nbsp;years, Nonemployee Director may exercise that
portion of the Option exercisable upon the date Nonemployee Director ceases
being a director at any time within the period beginning on the day after
Nonemployee Director ceases being a director and ending at the close of trading
on the Exchange thirty (30)&nbsp;days later. If Nonemployee Director dies within the
thirty (30)&nbsp;day period and shall not have fully exercised the Option, the
executor(s) or administrator(s) of Nonemployee Director&#146;s estate, or any
person(s) to whom the Option was transferred by will or the applicable laws of
distribution and descent, may exercise the remaining portion of the Option at
any time during a period beginning on the day after the date of Nonemployee
Director&#146;s death and ending at the close of trading on the Exchange on the
anniversary of death one (1)&nbsp;year later.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If Nonemployee Director dies while a member of the Board of
Directors of the Company, the Option, to the extent exercisable by Nonemployee
Director at the date of death, may be exercised by the executor(s) or
administrator(s) of Nonemployee Director&#146;s estate, or any person(s) to whom the
Option was transferred by will or the applicable laws of distribution and
descent, at any time during a period beginning on</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the day after the date of Nonemployee Director&#146;s death and ending at the
close of trading on the Exchange on the anniversary of death one (1)&nbsp;year
later.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Option is exercised by the executors,
administrators, legatees, or distributees of the estate of a deceased
Nonemployee Director, the Company shall be under no obligation to issue stock
thereunder unless and until the Company is satisfied that the person(s)
exercising the Option is the duly appointed legal representative of Nonemployee
Director&#146;s estate or the proper legatee or distributee thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If Nonemployee Director ceases being a director of the Company by reason of
Nonemployee Director&#146;s gross and willful misconduct, including but not limited to, (i)
fraud or intentional misrepresentation; (ii)&nbsp;embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any affiliate of the Company;
(iii)&nbsp;breach of fiduciary duty, or (iv)&nbsp;any other gross or willful misconduct, as
determined by the Board, in its sole and conclusive discretion, the unexercised portion
of the Option granted to such Nonemployee Director shall immediately be forfeited as of
the time of the misconduct. If the Board determines subsequent to the time Nonemployee
Director ceases being a director of the Company for whatever reason, that Nonemployee
Director engaged in conduct while a member of the Board of Directors of the Company
that would constitute gross and willful misconduct, the Option shall terminate as of
the time of such misconduct. Furthermore, if the Option is exercised in whole or in
part and the Board thereafter determines that Nonemployee Director engaged in gross and
willful misconduct while a member of the Board of Directors of the Company at any time
prior to the date of such exercise, the Option shall be deemed to have terminated as of
the time of the misconduct and the Company may elect to rescind the Option exercise.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of this Section&nbsp;3, if the last day of the relevant period is a day
upon which the Exchange is not open for trading or the Common Stock is not trading on
that day, the relevant period will expire at the close of trading on such earlier
business day on which the Exchange is open and the Common Stock is trading.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Manner of Exercise</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nonemployee Director or other proper party may exercise the Option only by
delivering within the term of the Option written notice to the Company at its principal
office in Minneapolis, Minnesota, stating the number of shares as to which the Option
is being exercised and, except as provided in Sections&nbsp;4B(2) and 4C, accompanied by
payment in full of one hundred percent (100%) of the Option price.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Nonemployee Director may, at his/her election, pay the Option price as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by cash or check (bank check, certified check, or personal
check),</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>by delivery of shares of Common Stock to the Company, which shall
have been owned for at least six (6)&nbsp;months and have a fair market value per
share on the date of surrender equal to the exercise price.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of Section&nbsp;4B(2), the fair market value of the Company&#146;s Common Stock
shall be the closing price of the Common Stock on the Exchange on the day immediately
preceding the date of exercise. If there is not a quotation available for such day,
then the closing price on the next preceding day for which such a quotation exists
shall be determinative of fair market value. If the shares are not then traded on an
exchange, the fair</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>market value shall be the average of the closing bid and asked prices of the Common
Stock as reported by the National Association of Securities Dealers Automated
Quotation System. If the Common Stock is not then traded on NASDAQ or on an
exchange, then the fair market value shall be determined in such manner as the
Company shall deem reasonable.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Nonemployee Director may, with the consent of the Company, pay the Option
price by delivery to the Company of a properly executed exercise notice, together with
irrevocable instructions to a broker to promptly deliver to the Company from sale or
loan proceeds the amount required to pay the exercise price.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Change of Control</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding Section&nbsp;2A hereof, the entire Option shall become immediately
and fully exercisable upon a &#147;Change of Control&#148; and shall remain fully exercisable
until either exercised or expiring by its terms. A &#147;Change of Control&#148; means:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an acquisition by any individual, entity or group (within the
meaning of Section&nbsp;13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the &#147;1934 Act&#148;)), (a &#147;Person&#148;), of beneficial ownership (within the
meaning of Rule&nbsp;13d-3 of the 1934 Act) which, together with other acquisitions
by such Person, results in the aggregate beneficial ownership by such Person of
30% or more of either</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the then outstanding shares of Common Stock of
the Company (the &#147;Outstanding Company Common Stock&#148;) or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the &#147;Outstanding Company Voting Securities&#148;);</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided, however, that the following acquisitions will not result in a
Change of Control:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an acquisition by the Employee or
any group that includes the Employee, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an acquisition by any entity
pursuant to a transaction that complies with clauses (a), (b)&nbsp;and
(c)&nbsp;of Section&nbsp;5A(3) below; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (the &#147;Incumbent Board&#148;) cease for any reason to
constitute at least a majority of said Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company&#146;s shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board will be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial membership on the
Board occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies by or on behalf of a Person other than the Board; or</TD>
</TR>




</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consummation of a reorganization, merger or consolidation of the
Company with or into another entity or a statutory exchange of Outstanding
Company Common Stock or Outstanding Company Voting Securities or sale or other
disposition of all or substantially all of the assets of the Company (&#147;Business
Combination&#148;); excluding, however, such a Business Combination pursuant to which</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly,
a majority of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or comparable
equity interests), as the case may be, of the surviving or acquiring
entity resulting from such Business Combination (including, without
limitation, an entity that as a result of such transaction beneficially
owns 100% of the outstanding shares of common stock and the combined
voting power of the then outstanding voting securities (or comparable
equity securities) or all or substantially all of the Company&#146;s assets
either directly or indirectly) in substantially the same proportions (as
compared to the other holders of the Company&#146;s common stock and voting
securities prior to the Business Combination) as their respective
ownership, immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>no Person (excluding (i)&nbsp;any employee benefit
plan (or related trust) sponsored or maintained by the Company or such
entity resulting from such Business Combination or any entity controlled
by the Company or the entity resulting from such Business Combination,
(ii)&nbsp;any entity beneficially owning 100% of the outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities (or comparable equity securities) or all or
substantially all of the Company&#146;s assets either directly or indirectly
and (iii)&nbsp;the Employee and any group that includes the Employee)
beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock (or comparable equity interests) of
the entity resulting from such Business Combination or the combined
voting power of the then outstanding voting securities (or comparable
equity interests) of such entity, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>immediately after the Business Combination, a
majority of the members of the board of directors (or comparable
governors) of the entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such
Business Combination; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Adjustments; Fundamental Change</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If there shall be any change in the number or character of the Common Stock of
the Company through merger, consolidation, reorganization, recapitalization, dividend
in the form of stock (of whatever amount), stock split or other change in the corporate
structure of</TD>
</TR>

</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company, and all or any portion of the Option shall then be unexercised and not
yet expired, appropriate adjustments in the outstanding Option shall be made by the
Company, in order to prevent dilution or enlargement of Employee&#146;s Option rights.
Such adjustments shall include, where appropriate, changes in the number of shares of
Common Stock and the price per share subject to the outstanding Option.</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of a proposed (i)&nbsp;dissolution or liquidation of the Company, (ii)
a sale of substantially all of the assets of the Company, (iii)&nbsp;a merger or
consolidation of the Company with or into any other corporation, regardless of whether
the Company is the surviving corporation, or (iv)&nbsp;a statutory share exchange involving
the capital stock of the Company (each, a &#147;Fundamental Change&#148;), the Management
Organization and Compensation Committee of the Board (the &#147;Committee&#148;) may, but shall
not be obligated to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to a Fundamental Change that involves a merger,
consolidation or statutory share exchange, make appropriate provision for the
protection of the Option by the substitution of options and appropriate voting
common stock of the corporation surviving any such merger or consolidation or,
if appropriate, the &#147;parent corporation&#148; (as defined in Section 424(e) of the
Internal Revenue Code of 1986, as amended from time to time, and any regulations
promulgated thereunder, or any successor provision) of the Company or such
surviving corporation, in lieu of the Option and shares of Common Stock of the
Company, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to any Fundamental Change, including, without
limitation, a merger, consolidation or statutory share exchange, declare, prior
to the occurrence of the Fundamental Change, and provide written notice to the
holder of the Option of the declaration, that the Option, whether or not then
exercisable, shall be canceled at the time of, or immediately prior to the
occurrence of, the Fundamental Change in exchange for payment to the holder of
the Option, within 20&nbsp;days after the Fundamental Change, of cash (or, if the
Committee so elects in lieu of solely cash, of such form(s) of consideration,
including cash and/or property, singly or in such combination as the Committee
shall determine, that the holder of the Option would have received as a result
of the Fundamental Change if the holder of the Option had exercised the Option
immediately prior to the Fundamental Change) equal to, for each share of Common
Stock covered by the canceled Option, the amount, if any, by which the Fair
Market Value (as defined in this Section&nbsp;6B) per share of Common Stock exceeds
the exercise price per share of Common Stock covered by the Option. At the time
of the declaration provided for in the immediately preceding sentence, the
Option shall immediately become exercisable in full and the holder of the Option
shall have the right, during the period preceding the time of cancellation of
the Option, to exercise the Option as to all or any part of the shares of Common
Stock covered thereby in whole or in part, as the case may be. In the event of
a declaration pursuant to this Section&nbsp;6B, the Option, to the extent that it
shall not have been exercised prior to the Fundamental Change, shall be canceled
at the time of, or immediately prior to, the Fundamental Change, as provided in
the declaration. Notwithstanding the foregoing, the holder of the Option shall
not be entitled to the payment provided for in this Section&nbsp;6B if such Option
shall have expired or been forfeited. For purposes of this Section&nbsp;6B only,
&#147;Fair Market Value&#148; per share of Common Stock means the fair market value, as
determined in good faith by the Committee, of the consideration to be received
per share of Common Stock by the shareholders of the Company upon the occurrence
of the Fundamental Change, notwithstanding anything to the contrary provided in
this Agreement.</TD>
</TR>




</TABLE>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Miscellaneous</U></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Option is granted pursuant to the Plan and is subject to its terms. The
terms of the Plan are available for inspection during business hours at the principal
offices of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Neither the Plan nor any action taken hereunder shall be construed as giving
Nonemployee Director any right to be retained in the service of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Neither Nonemployee Director, Nonemployee Director&#146;s legal representative, nor
the executor(s) or administrator(s) of Nonemployee Director&#146;s estate, or any person(s)
to whom the Option was transferred by will or the applicable laws of distribution and
descent shall be, or have any of the rights or privileges of, a shareholder of the
Company in respect of any shares of Common Stock receivable upon the exercise of this
Option, in whole or in part, unless and until such shares shall have been issued upon
exercise of this Option.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall at all times during the term of the Option reserve and keep
available such number of shares as will be sufficient to satisfy the requirements of
this Agreement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The internal law, and not the law of conflicts, of the State of Minnesota,
U.S.A., shall govern all questions concerning the validity, construction and effect of
this Agreement, the Plan and any rules and regulations relating to the Plan or this
Option.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nonemployee Director hereby consents to the transfer to his employer or the
Company of information relating to his/her participation in the Plan, including the
personal data set forth in this Agreement, between them or to other related parties in
the United States or elsewhere, or to any financial institution or other third party
engaged by the Company, but solely for the purpose of administering the Plan and this
Option. Nonemployee Director also consents to the storage and processing of such data
by such persons for this purpose.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IN WITNESS WHEREOF, </B>the parties have caused this Agreement to be executed on the day and year first
above written.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">GRACO INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">
&nbsp;</TD>
    <TD>.&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Its Vice President, General Counsel&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">and Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">NONEMPLOYEE DIRECTOR<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">
&nbsp;</TD>
    <TD>.&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="2" align="left">&#171;NAME&#187;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt">Nonemployee Director Stk Opt Agmt 4/2009</div>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.22
<SEQUENCE>3
<FILENAME>c56397exv10w22.htm
<DESCRIPTION>EX-10.22
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w22</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
 <DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.22
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>GRACO INC.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>NONEMPLOYEE DIRECTOR RETAINER/MEETING FEES<BR>
CASH/STOCK/DEFERRED STOCK</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ELECTION/CHANGE IN ELECTION FORM</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px"><B>SUBMIT TO:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Secretary to the Board, Legal Department, Graco Inc., P.O. Box 1441, Mpls, MN. 55440-1441</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>NAME:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><br><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
Stock may be registered in director&#146;s name and name of one other person. Print name(s)
exactly as you wish them to appear in stock register.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>EFFECTIVE DATE: This Form must be completed and delivered to the Secretary to the Board before
the beginning of the tax year in which the services are to be performed. Your election will remain
in effect for, and may not be changed during, the entire tax year. A director is encouraged to
complete a new Election Form each year as some of the content may have been amended from that
contained in prior election forms. However, if a Change in Election Form is not received prior to
the beginning of any tax year, the election currently in effect will remain in effect for the next
tax year. An individual who becomes a nonemployee director during a tax year may participate in
this Program only if the individual has not previously been eligible to participate in any deferred
compensation plan required to be aggregated with this Program pursuant to regulations issued under
Section&nbsp;409A of the Internal Revenue Code. If eligible, the individual must complete and deliver
his Initial Election Form to the Secretary no later than 30&nbsp;days after the date that the individual
first becomes a nonemployee director and the election will be applicable only to services performed
after receipt of the Form by the Secretary.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check One:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Initial Election</B>. Allocate my annual retainer and meeting fees according to the
percentages indicated below.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Change in Election. </B>I elect to change my election for the taxable year following
the current taxable year and all taxable years subsequent thereto, unless I submit a
Change in Election Form prior to the commencement of the applicable taxable year.
Allocate my annual retainer and meeting fees according to the percentages indicated
below.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fill in Blanks:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Retainer: </B>&#091;Select one: 0%, 25%, 50%, 75%, 100%&#093;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Retainer paid in cash:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Retainer paid in Graco stock:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Retainer credited to Deferred Stock Account:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TOTAL</B><SUP style="font-size: 85%; vertical-align: text-top"><B>**</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>

    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Meeting Fees (Board and Committee): </B>&#091;Select one: 0%, 25%, 50%, 75%, 100%&#093;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Meeting Fees paid in cash:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Meeting Fees paid in Graco stock:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Percentage of Meeting Fees credited to Deferred Stock Account:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">%</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

    <TD>&nbsp;</TD>

    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>TOTAL</B><SUP style="font-size: 85%; vertical-align: text-top"><B>**</B></SUP></DIV></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-bottom: 1px solid #000000">%</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">**</SUP> &nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><I>Total cannot exceed 100%</I></TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<BR>
<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PAYMENT ELECTION:</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>If you have made a Deferred Stock Account Election, select one of the payment options below. NOTE:
If you are changing your payment election from a payment election previously made, the new payment
election will apply only to deferrals made with respect to services performed in tax years
subsequent to the current tax year. Previous payment elections are irrevocable with respect to
services performed in the tax years to which they apply.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I elect to receive payment from my Deferred Stock Account by the method checked below.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Lump sum. </B>Credits to a Deferred Stock Account will be paid in full by the issuance of shares of Graco Common Stock
plus cash in lieu of any fractional share on January&nbsp;10, or the first business day after January&nbsp;10, of the year
following my separation from service, as defined by regulations and rulings issued under Section&nbsp;409A of the Internal
Revenue Code, as amended (the &#147;IRC&#148;), or such other date as elected by me. Alternative date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.(month/date/year)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT> </TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Installments. </B>Number of installments elected (from 2 to 15): <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. Credits to a Deferred Stock Account will be paid
in annual installments by the issuance of shares of
Graco Common Stock, plus cash in lieu of any
fractional share, on January&nbsp;10, or the first
business day after January&nbsp;10, of each year
following my separation from service on the Board as
defined by regulations and rulings issued under
Section&nbsp;409A of the IRC,. The number of annual
installments may range from 2 to 15. The amount of
each payment will be computed by multiplying the
number of shares credited to my Deferred Stock
Account as of January&nbsp;10 of each year by a fraction,
the numerator of which is one and the denominator of
which is the total number of installments elected
(not to exceed fifteen) minus the number of
installments previously paid. Amounts paid prior to
the final installment payment will be rounded to the
nearest whole number of shares. The final
installment payment will be for the whole number of shares remaining credited to my Deferred Stock
Account, plus cash in lieu of any fractional share.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>BENEFICIARY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In order to permit the payment of your Deferred Stock Account to a beneficiary in the event of your
death prior to the complete payout of your Deferred Stock Account, provide the information
indicated below:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Primary Beneficiary(ies)*</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom"><B>Secondary Beneficiary(ies)*</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">(If no primary beneficiary survives you)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name<div style="border-bottom: 1px solid #000000; margin-left: 32px"></div>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Name<div style="border-bottom: 1px solid #000000; margin-left: 32px"></div></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address<div style="border-bottom: 1px solid #000000; margin-left: 48px"></div>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Address<div style="border-bottom: 1px solid #000000; margin-left: 48px"></div></TD>
</TR>

<TR valign="bottom">
    <TD valign="top" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name<div style="border-bottom: 1px solid #000000; margin-left: 32px"></div>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Name<div style="border-bottom: 1px solid #000000; margin-left: 32px"></div></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Address<div style="border-bottom: 1px solid #000000; margin-left: 48px"></div>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Address<div style="border-bottom: 1px solid #000000; margin-left: 48px"></div></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:20px; text-indent:-20px">*&nbsp;&nbsp;&nbsp;&nbsp;Your Primary Beneficiaries will share equally unless any
beneficiary dies before you or
unless you specify otherwise
above.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:20px; text-indent:-20px">*&nbsp;&nbsp;&nbsp;&nbsp;Your Secondary Beneficiaries will share
equally unless any beneficiary dies
before you or unless you specify
otherwise above.</div></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I have made the elections indicated above and on the reverse side and have received and read the
Terms applicable to this Stock/Deferred Stock Program which are set forth in the document attached
hereto entitled Graco Inc. Nonemployee Director Stock and Deferred Stock Program Terms and hereby
agree to such Terms.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->

<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px; width: 50%; border-top: 1px solid #000000">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="font-size: 10pt; margin-top: 6pt; width: 100%; border-top: 1px solid #000000">Signature</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>GRACO INC.<BR>
NONEMPLOYEE DIRECTOR<BR>
STOCK AND DEFERRED STOCK PROGRAM</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>TERMS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Purpose of the Stock and Deferred Stock Program</U>. The purpose of the Graco
Inc. Nonemployee Director Stock and Deferred Stock Program (the &#147;Program&#148;) is to provide an
opportunity for nonemployee members of the Board of Directors (the &#147;Board&#148;) of Graco Inc. (&#147;Graco&#148;
or the &#147;Company&#148;) to increase their ownership of Graco Common Stock (&#147;Common Stock&#148;) and thereby
align their interest in the long-term success of the Company with that of the other shareholders.
Each nonemployee director may elect to receive all or a portion of his or her retainer and/or any
fees payable for attendance at Board or Committee meetings in the form of shares of Common Stock or
defer the receipt of such shares until a later date pursuant to an election made under the Program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Eligibility</U>. Directors of the Company who are not also officers or other employees
of the Company or its subsidiaries are eligible to participate in the Program (&#147;Eligible
Directors&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Administration</U>. The Program will be administered by the Secretary of the Company
(the &#147;Administrator&#148;). Since the issuance or crediting of shares of Common Stock pursuant to the
Program is based on elections made by Eligible Directors, the Administrator&#146;s duties under the
Program will be limited to matters of interpretation and administrative oversight. All questions
of interpretation of the Program will be determined by the Administrator, and each determination,
interpretation or other action that the Administrator makes or takes pursuant to the provisions of
the Program will be conclusive and binding for all purposes and on all persons. The Administrator
will not be liable for any action or determination made in good faith with respect to the Program.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Election to Receive Stock and Stock Issuance</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <U>Election to Receive Stock/Credit in Lieu of Cash</U>. On forms provided by
the Company, each Eligible Director may irrevocably elect (&#147;Stock Election&#148;) in lieu of
cash, (i)&nbsp;to be issued shares of Common Stock or (ii)&nbsp;to have credited to an account
(&#147;Deferred Stock Account&#148;) the number of shares of Common Stock having a Fair Market Value,
as defined in Section&nbsp;4.3, equal to 25%, 50%, 75% or 100% of the annual cash retainer (the
&#147;Retainer&#148;) and/or 25%, 50%, 75% or 100% of any fees payable for attendance at Board or
Committee meetings (the &#147;Meeting Fees&#148;) payable to that director for services rendered as a
director (&#147;Participating Director&#148;). Eligible Directors are customarily paid the Retainer
and the Meeting Fees in quarterly installments in arrears at the end of
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">each calendar quarter. Any Stock Election must be received by the Company before the
commencement of the first full taxable year with respect to which such election is made.
Any Stock Election may only be amended or revoked (&#147;Amended Stock Election&#148;) in accordance
with the procedure set forth in Section&nbsp;4.4.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1. <U>Initial Election</U>. An individual who first becomes an Eligible
Director during a taxable year may make a Stock Election by delivering an election
form to the Secretary of the Company within thirty (30)&nbsp;calendar days of the date
that the individual first becomes an Eligible Director, provided that the
individual has not previously been eligible to participate in any deferred
compensation plan required to be aggregated with this Program pursuant to
regulations issued under Section&nbsp;409A of the Internal Revenue Code. In the event
that an individual is permitted to become a Participating Director under this
subsection, the Stock Election will be applicable only to services performed after
the election form is received by the Secretary.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. <U>Issuance of Stock/Application of Credit in Lieu of Cash</U>. If the Stock
Election is for the issuance of shares of Common Stock, shares of Common Stock having a
Fair Market Value equal to the amount of the Retainer and/or Meeting Fees so elected shall
be issued to each Participating Director when each quarterly installment of the Retainer
and the Meeting Fees is customarily paid. The Company shall not issue fractional shares,
but in lieu thereof shall pay cash of equivalent value using the same Fair Market Value
used to determine the number of Shares to be issued on the relevant issue date. If the
Stock Election is for a credit to a Deferred Stock Account, the number of shares of Common
Stock (rounded to the nearest hundredth of a share) having a Fair Market Value equal to the
amount of the Retainer and/or the Meeting Fees so elected shall be credited to the
Participating Director&#146;s Deferred Stock Account when each quarterly installment of the
Retainer and Meeting Fees is customarily paid. In the event that a Participating Director
elects to receive less than 100% of each quarterly installment of the Retainer and/or
Meeting Fees in shares of Common Stock, either issued or credited, he or she shall receive
the balance of the quarterly installment in cash.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. <U>Fair Market Value</U>. For purposes of converting dollar amounts into shares
of Common Stock, the Fair Market Value of each share of Common Stock shall be equal to the
closing price of one share of the Company&#146;s Common Stock on the New York Stock
Exchange-Composite Transactions on the last business day of the calendar quarter for which
such shares are issued or credited.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. <U>Change in Election</U>. Each Participating Director may irrevocably elect in
writing to change an earlier Stock Election, either to elect to be issued shares of Common
Stock or to have credited to the Participating Director&#146;s Deferred Stock Account, a number
of shares of Common Stock having a Fair
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Market Value equal to a percentage of the Participating Director&#146;s Retainer and/or
Meeting Fees different from the percentages previously elected or to receive the entire
Retainer and/or Meeting Fees in cash (an &#147;Amended Stock Election&#148;). An Amended Stock
Election shall not become effective until the commencement of the first full taxable year
after the date of receipt of such Amended Stock Election by the Company and shall only
apply prospectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. <U>Termination of Service as a Director</U>. If a Participating Director leaves
the Board before the conclusion of any calendar quarter and has elected to be issued shares
of Common Stock, he or she will be paid the quarterly installment of the Retainer and
Meeting Fees, not in shares of Common Stock, but entirely in cash, notwithstanding that a
Stock Election or Amended Stock Election is on file with the Company. The date of
termination of a Participating Director&#146;s service as a director of the Company will be
deemed to be the date of termination recorded on the personnel or other records of the
Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. <U>Dividend Credit</U>. Each time a dividend is paid on the Common Stock, each
Participating Director who has a Deferred Stock Account shall receive a credit to his or
her Deferred Stock Account equal to that number of shares of Common Stock (rounded to the
nearest one-hundredth of a share) having a Fair Market Value on the dividend payment date
equal to the amount of the dividend payable on the number of shares of Common Stock
credited to the Participating Director&#146;s Deferred Stock Account on the dividend record
date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Payment of Deferred Stock Account</U>. Subject to the regulations and rulings issued
under Section&nbsp;409A of the Internal Revenue Code, as amended (the &#147;IRC&#148;), the following rules apply.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <U>Payment Election</U>. At the time of making the Stock Election in which the
Participating Director elects to have a Deferred Stock Account credited in accordance with
the provisions of Section&nbsp;4.1, the Participating Director will also elect the manner and
timing for payment of the amounts credited to his or her Deferred Stock Account (&#147;Payment
Election&#148;) from the alternatives described in Section&nbsp;5.2. The Participating Director may
change the manner and timing for payment of amounts to be credited to his or her Deferred
Stock Account by executing another Payment Election; provided, however, that the previously
made Payment Election will be irrevocable as to all amounts credited to the Participating
Director&#146;s Deferred Stock Account prior to the effective date of the new Payment Election.
A new Payment Election shall not become effective until the commencement of the first full
taxable year after the date of receipt of such new Payment Election by the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. <U>Payment from Deferred Stock Accounts</U>. A Participating Director may elect
to receive payment from his or her Deferred Stock Account in a lump sum or installments.
Payments, whether in a lump sum or by installments, shall be made in shares of Common Stock
plus cash in lieu of any fractional share.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Unless the Participating Director elects to receive payment in installments, credits
to a Participating Director&#146;s Deferred Stock Account shall be payable in full on January&nbsp;10
of the year following the Participating Director&#146;s termination from service as defined in
regulations and rulings issued under Section&nbsp;409A of the IRC, the first business day after
January&nbsp;10, or such other date as elected by the Participating Director pursuant to Section
5.1. If the Participating Director elects to receive payment from his or her Deferred
Stock Account in installments, each installment payment will be made annually on January&nbsp;10
of each year, or the first business day after January&nbsp;10, and the amount of each payment
will be computed by multiplying the number of shares credited to the Deferred Stock Account
as of January&nbsp;10 of each year by a fraction, the numerator of which is one and the
denominator of which is the total number of installments elected (not to exceed fifteen)
minus the number of installments previously paid. Amounts paid prior to the final
installment payment will be rounded to the nearest whole number of shares; the final
installment payment shall be for the whole number of shares remaining credited to the
Deferred Stock Account, plus cash in lieu of any fractional share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <U>Six-Month Delay in Commencement of Payment</U>. If a Participating Director
as of the date of payment is a &#147;specified employee&#148; as defined by the regulations issued
under Section&nbsp;409A, the payment (if lump sum) or the initial payment (if installments) to
the Participating Director from his or her Deferred Stock Account shall be delayed until
six (6)&nbsp;months following the date upon which the payment would have otherwise been made
pursuant to Section&nbsp;5.2 of these Terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Beneficiary</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <U>Beneficiary Designation</U>. A Participating Director may designate a
beneficiary or beneficiaries who, upon his or her death, shall immediately receive the full
payment of all unpaid credits to said Participating Director&#146;s Deferred Stock Account,
including payments for which the Participating Director has elected installment payments.
All designations shall be in writing and shall be effective only if and when delivered to
the Company during the lifetime of the Participating Director. Unless otherwise indicated
by the Participating Director, no amounts shall be paid to the estate or heirs of
beneficiaries who die before the Participating Director.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1. <U>Rules</U>. Unless a Participating Director has otherwise specified
in his Beneficiary designation, the following rules shall apply:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If there is insufficient evidence that a Beneficiary was living
at the time of the death of the Participating Director, the Beneficiary
shall be deemed to be not living at the time of the Participating
Director&#146;s death.
</DIV>
<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Beneficiaries designated by the Participating Director shall
become fixed at the time of the Participating Director&#146;s death so that, if
a Beneficiary survives the Participating Director but dies before the
receipt of payment due such Beneficiary hereunder, such payment shall be
made to the representatives of such Beneficiary&#146;s estate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the Participating Director designates as a Beneficiary the
person who is the Participating Director&#146;s spouse on the date of the
designation, either by name or relationship, or both, the dissolution,
annulment or other legal termination of the marriage between the
Participating Director and such person shall automatically revoke such
designation. The foregoing shall not prevent the Participating Director
from designating a former spouse as a Beneficiary on a form signed by the
Participating Director and received by the Secretary of the Company after
the date of the legal termination of the marriage between the
Participating Director and such former spouse, and during the
Participating Director&#146;s lifetime. Notwithstanding the foregoing, if the
Participating Director has elected to have the Stock registered in the
name of the Participating Director and another person, and the
Participating Director has commenced receiving payment under the Program,
the joint owner of the Stock may not be changed.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any designation of a Beneficiary by name accompanied by a
description of the relationship of the Beneficiary to the Participating
Director shall be given effect without regard to whether the relationship
to the Participating Director exists either then or at the time of the
Participating Director&#146;s death.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any designation of a Beneficiary only by statement of the
Beneficiary&#146;s relationship to the Participating Director shall be
effective only to designate the person or persons standing in that
relationship to the Participating Director at the time of the
Participating Director&#146;s death.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <U>Change of Beneficiary</U>. A Participating Director may from time to time
during his or her lifetime change his or her beneficiary or beneficiaries by a written
instrument delivered to the Company. In the event a Participating Director shall not
designate a beneficiary or beneficiaries pursuant to this Section, or if for any reason
such designation shall be ineffective, in whole or in part, the distribution that otherwise
would have been paid to such Participating Director shall be paid to his or her estate and
in such event, the term &#147;beneficiary&#148; shall include his or her estate.
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Limitation on Rights of Eligible and Participating Directors</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. <U>Service as a Director</U>. Nothing in the Program will interfere with or
limit in any way the right of the Company&#146;s Board or its shareholders to remove an Eligible
or Participating Director from the Board. Neither the Program nor any action taken
pursuant to it will constitute or be evidence of any agreement or understanding, express or
implied, that the Company&#146;s Board or its shareholders have retained or will retain an
Eligible or Participating Director for any period of time or at any particular rate of
compensation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. <U>Nonexclusivity of the Program</U>. Nothing contained in the Program is
intended to effect, modify or rescind any of the Company&#146;s existing compensation programs
or programs or to create any limitations on the Board&#146;s power or authority to modify or
adopt compensation arrangements as the Board may from time to time deem necessary or
desirable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Program Amendment, Modification and Termination</U>. The Board may suspend or
terminate the Program at any time. The Board may amend the Program from time to time in such
respects as the Board may deem advisable in order that the Program will conform to any change in
applicable laws or regulations or in any other respect that the Board may deem to be in the
Company&#146;s best interests.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Participants are General Creditors of the Company</U>. The Participating Directors
and beneficiaries thereof shall be general, unsecured creditors of the Company with respect to any
payments to be made pursuant to the Program and shall not have any preferred interest by way of
trust, escrow, lien or otherwise in any specific assets of the Company. If the Company shall, in
fact, elect to set aside monies or other assets to meet its obligations hereunder (there being no
obligation to do so), whether in a grantor&#146;s trust or otherwise, the same shall, nevertheless, be
regarded as part of the general assets of the Company subject to the claims of its general
creditors, and neither any Participating Director nor any beneficiary thereof shall have a legal,
beneficial or security interest therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;<U>Miscellaneous</U>.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. <U>Securities Law and Other Restrictions</U>. Notwithstanding any other
provision of the Program or any Stock Election or Amended Stock Election delivered pursuant
to the Program, the Company will not be required to issue any shares of Common Stock under
the Program and a Participating Director may not sell, assign, transfer or otherwise
dispose of shares of Common Stock issued pursuant to the Program, unless:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) there is in effect with respect to such shares a registration statement
under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;) and any
applicable state securities laws or an exemption from such registration under the
Securities Act and applicable state securities laws, and
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) there has been obtained any other consent, approval or permit from any
other regulatory body that the Administrator, in his or her sole discretion, deems
necessary or advisable. The Company may condition such issuance, sale or transfer
upon the receipt of any representations or agreements from the parties involved,
and the placement of any legends on certificates representing shares of Common
Stock, as may be deemed necessary or advisable by the Company, in order to comply
with such securities law or other restriction.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. <U>Adjustment to Shares</U>. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, divestiture or extraordinary dividend, an
appropriate adjustment shall be made in the number and/or kind of securities available for
issuance under the Plan to prevent the dilution or the enlargement of the rights of the
Eligible and Participating Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;<U>Governing Law</U>. The validity, construction, interpretation, administration and
effect of the Program and any rules, regulations and actions relating to the Program will be
governed by and construed exclusively in accordance with the laws of the State of Minnesota, to the
extent that federal laws and regulations do not apply.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;<U>Compliance with Section&nbsp;409A</U>. The plan is maintained as a nonqualified deferred
compensation arrangement under section 409A of the Internal Revenue Code. Each provision should be
interpreted and administered accordingly.
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><i>Effective 12/01/09</i></div>
<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
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<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>4
<FILENAME>c56397exv10w27.htm
<DESCRIPTION>EX-10.27
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.27
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMENDMENT TO<BR>
NONEMPLOYEE DIRECTOR<BR>
NONSTATUTORY STOCK OPTION AGREEMENTS<BR>
2003 THROUGH 2006</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>AMENDMENT </B>made this 4th day of December&nbsp;2009, (&#147;Amendment&#148;) to Nonemployee Director
Nonstatutory Stock Option Agreements between GRACO INC., a Minnesota corporation (the &#147;Company&#148;)
and Mark H. Rauenhorst (the &#147;Nonemployee Director&#148;) made in the years 2003 through 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>Nonemployee Director has resigned from the Board of Directors effective December&nbsp;4,
2009;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the Nonemployee Director Nonstatutory Stock Option Agreements made with the
Nonemployee Director in the years 2003 through 2006 (&#147;Stock Option Agreements 2003-2006&#148;) limited
the exercise period for directors leaving the Board to three (3)&nbsp;years from the date that the
Nonemployee Director ceased to be a director but in no event beyond the term;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the Nonemployee Director Nonstatutory Stock Option Agreements made with the
Nonemployee Director in the years 2007 through 2009 extended the exercise period for directors
leaving the Board to the expiration of the term of the Option;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the Board of Directors of the Company at its meeting on December&nbsp;4, 2009 resolved
that Subsection 3a(1) of the Stock Option Agreements (2003-2006) be amended to extend the period
during which the Nonemployee Director may exercise the applicable options to the expiration of the
term of the applicable option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE, </B>the Board amends the following agreements:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Nonemployee Director Nonstatutory Stock Option Agreement made on May&nbsp;6, 2003 between Graco<BR>
Inc. and Mark H. Rauenhorst</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Nonemployee Director Nonstatutory Stock Option Agreement made on April&nbsp;23, 2004 between<BR>
Graco Inc. and Mark H. Rauenhorst</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Nonemployee Director Nonstatutory Stock Option Agreement made on April&nbsp;22, 2005 between<BR>
Graco Inc. and Mark H. Rauenhorst</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Nonemployee Director Nonstatutory Stock Option Agreement made on April&nbsp;21, 2006 between<BR>
Graco Inc. and Mark H. Rauenhorst</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">by replacing the second sentence of Subsection 3a(1) in these agreements in its entirety with the
following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">Nonemployee Director may exercise all or any portion of the Option not yet
exercised for a period beginning on the day after the date of Nonemployee
Director&#146;s ceasing to be a director and ending at the close of trading on the
Exchange on the tenth anniversary of the Date of Grant, provided that if
Nonemployee Director dies during the period between the date of Nonemployee
Director ceasing to be a director and the expiration of the Option, the
executor(s) or administrator(s) of Nonemployee Director&#146;s estate, or any
person(s) to whom the Option was transferred by will or the applicable laws of
distribution and descent may exercise the unexercised portion of the Option at
any time during a period beginning the day after the date of Nonemployee
Director&#146;s death and ending at the close of trading on the Exchange on the
anniversary of death one (1)&nbsp;year later. In no event shall the Option be
exercisable following the tenth anniversary of the Date of Grant.</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>    <TD width="48%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>

    <TD colspan="3" align="left"><B>FOR THE BOARD</B>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR><td>&nbsp;</td></tr><tr>

    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Lee R. Mitau
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>

    <TD colspan="3" align="left"><B>Lee R. Mitau</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>

    <TD colspan="3" align="left"><B>Chairman</B>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>c56397exv31w1.htm
<DESCRIPTION>EX-31.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certification</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Patrick J. McHale, certify that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this Form 10-K/A of Graco Inc.; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:   February 17, 2010&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ <FONT style="font-variant: SMALL-CAPS">Patrick J. Mchale</font>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Patrick J. McHale&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>c56397exv31w2.htm
<DESCRIPTION>EX-31.2
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<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certification</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, James A. Graner, certify that:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>I have reviewed this Form 10-K/A of Graco Inc.; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report.</TD>
</TR>

</TABLE>
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:   February 17, 2010&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ <FONT style="font-variant: SMALL-CAPS">James A. Graner</FONT>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">James A. Graner&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>7
<FILENAME>c56397exv32.htm
<DESCRIPTION>EX-32
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Certification Under Section&nbsp;1350</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to Section&nbsp;1350 of Title 18 of the United States Code, each of the undersigned certifies
that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in this periodic report fairly
presents, in all material respects, the financial condition and results of operations of Graco Inc.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:   February 17, 2010&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ <FONT style="font-variant: SMALL-CAPS">Patrick J. McHale</FONT>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Patrick J. McHale&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:   February 17, 2010&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ <FONT style="font-variant: SMALL-CAPS">James A. Graner</FONT>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">James A. Graner&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Chief Financial Officer and Treasurer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




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