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<TITLE>Graco Inc. Form S-8, 2006 Employee Stock Purchase Plan</TITLE>
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<P ALIGN=RIGHT><FONT SIZE="2">Registration No.<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT> </P>


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<P ALIGN=CENTER><FONT SIZE="2">As filed with the Securities and Exchange Commission on February 23,
2007 </FONT></P>


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<P ALIGN=CENTER><FONT SIZE="2"><B>UNITED STATES<BR>SECURITIES AND EXCHANGE COMMISSION</B><BR>Washington, D.C. 20549 </FONT></P>

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<P ALIGN=CENTER><FONT SIZE="2"><B>FORM S-8<BR>REGISTRATION STATEMENT UNDER<BR>THE SECURITIES ACT OF 1933</B> </FONT></P>

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<P ALIGN=CENTER><FONT SIZE="2"><B>GRACO INC.</B><BR>(Exact
name of registrant as specified in its charter) </FONT> </P>

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     <TD WIDTH="50%"><FONT SIZE="2"><B>Minnesota</B> </FONT></TD>
     <TD WIDTH="50%" ALIGN="RIGHT"><FONT SIZE="2"><B>41-0285640</B> </FONT></TD></TR>
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     <TD><FONT SIZE="2">(State or other jurisdiction of<BR>incorporation or organization)</FONT></TD>
     <TD ALIGN="RIGHT"><FONT SIZE="2">(I.R.S. Employer Identification No.)</FONT></TD></TR>
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<P ALIGN=CENTER><FONT SIZE="2"><B>88-11th Avenue N.E.<BR>Minneapolis, Minnesota 55413-1894</B><BR>(Address of
registrant&#146;s principal executive offices, including zip code) </FONT></P>

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<P ALIGN=CENTER><FONT SIZE="2"><B>Graco Inc. 2006 Employee Stock Purchase Plan</B><BR>(Full title of the plan)</FONT></P>

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<P ALIGN=CENTER><FONT SIZE="2"><B>Karen P. Gallivan<BR>Vice President, General Counsel &amp; Secretary<BR>88-11th Avenue N.E.<BR>Minneapolis, Minnesota 55413-1894<BR>(612) 623-6664
</B><BR>(Name,
address and telephone number, <BR>including
area code, of agent for service) </FONT></P>

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<H1 ALIGN=CENTER><FONT SIZE="2">CALCULATION OF REGISTRATION FEE</FONT></H1>


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     <TH><FONT SIZE="2">Title of securities<BR>to be registered</FONT></TH>
     <TH ALIGN="CENTER"><FONT SIZE="2">Amount to be<BR>registered</FONT></TH>
     <TH ALIGN="CENTER"><FONT SIZE="2">Proposed maximum<BR>offering price per<BR>share<SUP>1</SUP> </FONT></TH>
     <TH ALIGN="CENTER"><FONT SIZE="2">Proposed maximum<BR>aggregate offering price<SUP>1</SUP></FONT></TH>
     <TH ALIGN="CENTER"><FONT SIZE="2">Amount of<BR>registration fee</FONT></TH></TR>
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     <TD COLSPAN=5><HR SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
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     <TD WIDTH="16%"><FONT SIZE="2">Common stock<BR>($1.00 par value)</FONT></TD>
     <TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE="2">2,000,000 shares</FONT></TD>
     <TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE="2">$41.56</FONT></TD>
     <TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE="2">$83,120,000</FONT></TD>
     <TD WIDTH="21%" ALIGN="CENTER"><FONT SIZE="2">$2,551.78</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">1. </FONT></TD>
<TD WIDTH=95%><FONT SIZE="2">Estimated
solely for the purpose of calculating the registration fee in accordance with Rule
457(c)and 457 (h)(1), based upon the average of the high and low prices of the Common
Stock as reported on the New York Stock Exchange on February 20, 2007.</FONT></TD></TR>
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<P ALIGN=CENTER><FONT SIZE="2">PART II.<BR>INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT</FONT></P>


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<P><FONT SIZE="2"><B>Item 3. </B>&nbsp;Incorporation of Documents by Reference. </FONT></P>

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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The  following
documents, which have been filed by Graco Inc. (the "Company") with the Securities and
Exchange Commission, are incorporated by reference in this Registration Statement, as of
their respective dates:</FONT></P>


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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            (a) &nbsp;&nbsp;&nbsp;&nbsp;The
Company's Annual Report on Form 10-K for the fiscal year ended       December 29, 2006;</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            (b) &nbsp;&nbsp;&nbsp;&nbsp;All
other reports of the Company filed pursuant to Section 13(a) or 15(d)       of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the       end of
the fiscal year covered by the Annual Report on Form 10-K referred to in       subsection
(a) above; and</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            (c) &nbsp;&nbsp;&nbsp;&nbsp;The
description of the Company's Common Stock, par value $1.00 per share,       contained in
any Registration Statement or report filed under the Exchange Act,       including any
amendment or report filed for the purpose of updating such description.</FONT></TD></TR>
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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective amendment
to this Registration Statement which indicates that all securities offered here have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part of this
Registration Statement from the respective dates of filing of such documents.</FONT></P>


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<P><FONT SIZE="2"><B>Item 4. </B>&nbsp;Description of Securities. </FONT></P>

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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</FONT></P>


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<P><FONT SIZE="2"><B>Item 5. </B>&nbsp;Interests of Named Experts and Counsel. </FONT></P>

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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Karen P. Gallivan, Vice
President, General Counsel and Secretary of the Company, has given her opinion about
certain legal matters affecting the shares of the Company's Common Stock registered under
this Registration Statement.  Ms. Gallivan is eligible to participate in the Graco Inc.
2006 Employee Stock Purchase Plan and, as of February 19, 2007, she is the beneficial
owner of 34,375 shares of the Company's Common Stock.</FONT></P>


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<P><FONT SIZE="2"><B>Item 6. </B>&nbsp;Indemnification of Directors and Officers. </FONT></P>

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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 302A.521 of the
Minnesota Business Corporation Act provides that a company shall, subject to certain
limitations, indemnify officers and directors made or threatened to be made a party to a
proceeding by reason of that officer or director's former or present official capacity
with the company.  As required, we will indemnify that person against judgments,
penalties, fines, settlements and reasonable expenses if the officer or director:</FONT></P>


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<TD WIDTH=7%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT SIZE="2">&#149; </FONT></TD>
<TD WIDTH=88%><FONT SIZE="2">has not been indemnified by another organization;</FONT></TD></TR>
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<TD WIDTH=7%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT SIZE="2">      &#149; </FONT></TD>
<TD WIDTH=88%><FONT SIZE="2">acted
in good faith;</FONT></TD></TR>
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<TD WIDTH=7%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT SIZE="2">      &#149; </FONT></TD>
<TD WIDTH=88%><FONT SIZE="2">has
not received an improper personal benefit and Section 302A.255 regarding
            director conflicts of interests, if applicable, has been satisfied;</FONT></TD></TR>
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<TD WIDTH=7%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT SIZE="2">      &#149; </FONT></TD>
<TD WIDTH=88%><FONT SIZE="2">assuming
the case is a criminal proceeding, the person had no reasonable cause             to
believe the conduct was unlawful; and</FONT></TD></TR>
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<TD WIDTH=7%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT SIZE="2">      &#149; </FONT></TD>
<TD WIDTH=88%><FONT SIZE="2">reasonably
believed that the conduct was in the best interests of the company             or, in the
case of an officer or director who is or was serving at the request             of the
company as a director, officer, partner, trustee, employee or agent of
            another organization or employee benefit plan, reasonably believed that the
            conduct was not opposed to the best interests of the company.</FONT></TD></TR>
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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article 7 of the
Company's Restated Articles of Incorporation, as amended to date, provides that no
director of the Company shall be personally liable to Graco or its shareholders for
monetary damages for breach of fiduciary duty by such director as a director, provided,
however, that the liability of the director shall not be eliminated or limited (i) for
breach of the director's duty of loyalty to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 302A.559 of the Minnesota Business Corporation
Act or Section 80A.23 of the Minnesota Securities Law or (iv) for any transactions from
which the director derived an improper personal benefit.  Article 7 further provides that
no amendment to or repeal of the Article shall apply to or have any effect on the
liability or alleged liability of any director for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.</FONT></P>


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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.01 of the
Company's Bylaws provides that the Company shall indemnify its officers and directors
under such circumstances and to the extent permitted by Section 302A.521, as now enacted
or as hereafter amended.</FONT></P>


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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company maintains
directors' and officers' liability insurance which covers certain liabilities and
expenses of its directors and officers and covers the Company for reimbursement of
payments to its directors and officers in respect of such liabilities and expenses.</FONT></P>


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<P><FONT SIZE="2"><B>Item 7. </B>&nbsp;Exemption from Registration Claimed. </FONT></P>

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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</FONT></P>


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<P><FONT SIZE="2"><B>Item 8. </B>&nbsp;Exhibits. </FONT></P>

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<TD WIDTH=5%><FONT SIZE="2">      3.1  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Restated
Articles of Incorporation of Graco Inc., as amended September 24, 2004
            (Incorporated by reference to Exhibit 3.1 to the Company's 2004 Annual Report
            on Form 10-K)</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">      4.1  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Rights
Agreement dated as of February 25, 2000, between the Company and Wells             Fargo,
formerly known as Norwest Bank Minnesota, National Association, as             Rights
Agent, including as Exhibit A the form of the Certificate of             Designation,
Preferences and Rights of Series A Junior Participating Preferred             Shares.
 (Incorporated  by reference to Exhibit 4 to the Company's Report on             Form 8-K
dated February 25, 2000)</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">      4.2  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Credit
Agreement dated April 1, 2006 between the Company and Wachovia Bank,             N.A.
(Incorporated by reference to Exhibit 10.1 to the Company's Report on             Form
 10-Q for the thirteen weeks ending March 31, 2006)</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">      5.1  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Opinion
and consent of Karen P. Gallivan, Vice President, General Counsel and
            Secretary of Graco Inc., dated February 22, 2007.</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">      23.1  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Consent
of Deloitte &amp; Touche LLP, independent registered public accounting firm.</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">      24.1  </FONT></TD>
<TD WIDTH=89%><FONT SIZE="2">Power
of Attorney</FONT></TD></TR>
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<P><FONT SIZE="2"><B>Item 9. </B>&nbsp;Undertakings. </FONT></P>

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<TD WIDTH=6%><FONT SIZE="2">A. </FONT></TD>
<TD WIDTH=94%><FONT SIZE="2">Post-Effective
Amendments.</FONT></TD></TR>
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<TD WIDTH=94%><FONT SIZE="2">
The undersigned registrant hereby undertakes:</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            (1) &nbsp;&nbsp;&nbsp;&nbsp;To
file, during any period in which offers or sales are being made, a       post-effective
amendment to this registration statement:</FONT></TD></TR>
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<TD WIDTH=90%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                  (a) &nbsp;&nbsp;&nbsp;&nbsp;To
include any prospectus required by Section 10(a)(3) of the             Securities Act;</FONT></TD></TR>
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<TD WIDTH=90%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                  (b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
reflect in the prospectus  any facts or events arising after the             effective
date of the registration statement (or the most recent post-effective
            amendment thereof) which, individually or in the aggregate, represent a
            fundamental change in the information set forth in the registration
statement.             Notwithstanding the foregoing, any increase or decrease in volume
of securities             offered (if the total dollar value of securities offered would
not exceed that             which is registered) and deviation from the low or high end
of the estimated             maximum offering range may be reflected in the form of
prospectus filed with             the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in             volume and price represent no more than a 20%
change in the maximum aggregate             offering price set forth in the "Calculation
of Registration Fee" table in the             effective registration statement;</FONT></TD></TR>
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<TD WIDTH=90%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                  (c) &nbsp;&nbsp;&nbsp;&nbsp;To
include any material information with respect to the plan of             distribution not
previously disclosed in the registration statement or any             material change to
such information in the registration statement;</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2"><I>provided, however,
</I>that paragraphs (i) and (ii) above will not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
that are incorporated by reference in this registration statement. </FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) &nbsp;&nbsp;&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities       Act, each such
post-effective amendment shall be deemed to be a new registration       statement
relating to the securities offered therein, and the offering of such       securities at
that time shall be deemed to be the initial bona fide offering thereof.</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) &nbsp;&nbsp;&nbsp;&nbsp;To
remove from registration by means of a post-effective amendment any of       the
securities being registered which remain unsold at the termination of the       offering.</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">B. </FONT></TD>
<TD WIDTH=95%><FONT SIZE="2">Subsequent
Documents Incorporated by Reference.</FONT></TD></TR>
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<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
registrant hereby undertakes that, for purposes of determining       any liability under
the Securities Act, each filing of the registrant's annual report       pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act that is       incorporated
by reference in the registration statement shall be deemed to be a new       registration
statement relating to the securities offered therein, and the offering       of such
securities at that time shall be deemed to be the initial bona fide offering
      thereof.</FONT></TD></TR>
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<TD WIDTH=5%><FONT SIZE="2">C. </FONT></TD>
<TD WIDTH=95%><FONT SIZE="2">Claims
for Indemnification.</FONT></TD></TR>
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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT SIZE="2">&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act may       be
permitted to directors, officers and controlling persons of the registrant       pursuant
to the foregoing provisions, or otherwise, the registrant has been advised       that in
the opinion of the Securities and Exchange Commission such indemnification is
      against public policy as expressed in the Act and is, therefore, unenforceable. In
      the event that a claim for indemnification against such liabilities (other than the
      payment by the registrant of expenses incurred or paid by a director, officer or
      other controlling person of the registrant in the successful defense of any action,
      suit or proceeding) is asserted by such director, officer or controlling person in
      connection with the securities being registered, the registrant will, unless in the
      opinion of its counsel the matter has been settled by controlling precedent, submit
      to a court of appropriate jurisdiction the question whether such indemnification by
      it is against public policy as expressed in the Act and will be governed by the
final       adjudication of such issue.</FONT></TD></TR>
</TABLE>
<BR>
<PAGE>

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<H1 ALIGN=CENTER><FONT SIZE="2">SIGNATURES</FONT></H1>


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<P><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the
requirements of the Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota on
the 23rd day of February, 2007. </FONT></P>


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<P ALIGN=LEFT><FONT SIZE="2"><B>GRACO INC.</B> </FONT></P>
<BR>
<BR>
<BR>

<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD WIDTH="5%"><FONT SIZE="2">By: </FONT></TD>
     <TD WIDTH="35%"><FONT SIZE="2"><U>/s/Karen P. Gallivan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD WIDTH="60%"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">Karen P. Gallivan</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">Vice President, General Counsel</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">and Secretary</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act, this Registration Statement has been signed by
the following persons in the capacities and on the date indicated. </FONT></P>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT SIZE="2">Signature</FONT></TH>
     <TH><FONT SIZE="2">Title</FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%">&nbsp;<FONT SIZE="2"></FONT></TD>
     <TD WIDTH="50%">&nbsp;<FONT SIZE="2"></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2"><U>/s/David A. Roberts&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD><FONT SIZE="2">Chairman, President and Chief Executive Officer</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">David A. Roberts</FONT></TD>
     <TD><FONT SIZE="2"><I>(Principal Executive Officer)</I> </FONT></TD></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%">&nbsp;<FONT SIZE="2"></FONT></TD>
     <TD WIDTH="50%">&nbsp;<FONT SIZE="2"></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2"><U>/s/James A. Graner&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD><FONT SIZE="2">Chief Financial Officer and Treasurer</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">James A. Graner</FONT></TD>
     <TD><FONT SIZE="2"><I>(Principal Financial and Accounting Officer)</I> </FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">David A. Roberts </FONT></TD>
     <TD><FONT SIZE="2">Director, Chairman of the Board</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Robert G. Bohn</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">William J. Carroll</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Jack W. Eugster</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">J. Kevin Gilligan</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Lee R. Mitau</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Martha A.M. Morfitt</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Mark H. Rauenhorst</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">William G. Van Dyke</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">R. William Van Sant</FONT></TD>
     <TD><FONT SIZE="2">Director</FONT></TD></TR>
</TABLE>
<BR>

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<P><FONT SIZE="2">David A. Roberts, by signing his name hereto, does hereby sign this
document on behalf of himself and each of the above named directors of the Registrant
pursuant to powers of attorney duly executed by such persons (set forth in Exhibit 24.1 to
this Registration Statement).</FONT></P>
<BR>

<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD WIDTH="50%"><FONT SIZE="2"><U>/s/David A. Roberts&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD WIDTH="50%"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">David A. Roberts</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">(For himself and as attorney-in-fact)</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT SIZE="2">Dated:&nbsp;<U>February 23, 2007</U> </FONT> </TD>
     <TD><FONT SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<PAGE>

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<H1 ALIGN=CENTER><FONT SIZE="2">EXHIBIT INDEX</FONT></H1>


<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH ALIGN="CENTER"><FONT SIZE="2">Exhibit Number</FONT></TH>
     <TH ALIGN="LEFT"><FONT SIZE="2">Description</FONT></TH>
     <TH ALIGN="CENTER"><FONT SIZE="2">Page</FONT></TH></TR>
<TR VALIGN="TOP">
     <TD COLSPAN=3><HR SIZE=1 COLOR=BLACK NOSHADE></TD></TR>
<TR VALIGN="TOP">
     <TD WIDTH="18%" ALIGN="CENTER"><FONT SIZE="2">3.1</FONT></TD>
     <TD WIDTH="59%" ALIGN="LEFT"><FONT SIZE="2">Restated Articles of
                   Incorporation of Graco Inc., as
                   amended September 24, 2004
                   (incorporated by reference to
                   Exhibit 3.1 to the Company's
                   2004 Annual Report on Form 10-K)
</FONT></TD>
     <TD WIDTH="23%" ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">4.1</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">Rights Agreement dated as of
                   February 25, 2000, between the
                   Company and Wells Fargo,
                   formerly known as Norwest Bank
                   Minnesota, National
                   Association, as Rights Agent,
                   including as Exhibit A the form
                   of the Certificate of
                   Designation, Preferences and
                   Rights of Series A Junior
                   Participating Preferred
                   Shares.  (Incorporated by
                   reference to Exhibit 4 to the
                   Company's Report on Form 8-K
                   dated February 25, 2000)</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">4.2</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">Credit Agreement dated April 1,
                   2006 between the Company and
                   Wachovia Bank, N.A.
                   (Incorporated by reference to
                   Exhibit 10.1 to the Company's
                   Report on Form 10-Q for the
                   thirteen weeks ending March 31,
                   2006)</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">5.1</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">Opinion and Consent of Karen P.
                   Gallivan, Vice President,
                   General Counsel and Secretary
                   of Graco Inc., dated February 22, 2007</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">23.1</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">Consent of Deloitte &amp; Touche
                   LLP, independent registered
                   public accounting firm.</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT SIZE="2">24.1</FONT></TD>
     <TD ALIGN="LEFT"><FONT SIZE="2">Power of Attorney</FONT></TD>
     <TD ALIGN="CENTER"><FONT SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>

</BODY>
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{"company-data": {"conformed-name": "GRACO INC", "cik": "0000042888", "assigned-sic": "3561", "irs-number": "410285640", "state-of-incorporation": "MN", "fiscal-year-end": "1225"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-140848", "film-number": "07644396"}, "business-address": {"street1": "88 11TH AVENUE NE", "city": "MINNEAPOLIS", "state": "MN", "zip": "55413-1894", "phone": "6126236000"}, "mail-address": {"street1": "C/O CORPORATE SERVICE COMPANY", "street2": "MULTIFOODS TOWER, 33 SOUTH 6TH STREET", "city": "MINNEAPOLIS", "state": "MN", "zip": "55402"}}
Graco Inc. Form S-8, 2006 Employee Stock Purchase Plan
Registration No.
As filed with the Securities and Exchange Commission on February 23,
2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GRACO INC.
(Exact
name of registrant as specified in its charter)
Minnesota
41-0285640
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
88-11th Avenue N.E.
Minneapolis, Minnesota 55413-1894
(Address of
registrant's principal executive offices, including zip code)
Graco Inc. 2006 Employee Stock Purchase Plan
(Full title of the plan)
Karen P. Gallivan
Vice President, General Counsel & Secretary
88-11th Avenue N.E.
Minneapolis, Minnesota 55413-1894
(612) 623-6664
(Name,
address and telephone number,
including
area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of securities
to be registered
Amount to be
registered
Proposed maximum
offering price per
share
1
Proposed maximum
aggregate offering price
1
Amount of
registration fee
Common stock
($1.00 par value)
2,000,000 shares
$41.56
$83,120,000
$2,551.78
1.
Estimated
solely for the purpose of calculating the registration fee in accordance with Rule
457(c)and 457 (h)(1), based upon the average of the high and low prices of the Common
Stock as reported on the New York Stock Exchange on February 20, 2007.
PART II.
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3.
Incorporation of Documents by Reference.
The  following
documents, which have been filed by Graco Inc. (the "Company") with the Securities and
Exchange Commission, are incorporated by reference in this Registration Statement, as of
their respective dates:
(a)     The
Company's Annual Report on Form 10-K for the fiscal year ended       December 29, 2006;
(b)     All
other reports of the Company filed pursuant to Section 13(a) or 15(d)       of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the       end of
the fiscal year covered by the Annual Report on Form 10-K referred to in       subsection
(a) above; and
(c)     The
description of the Company's Common Stock, par value $1.00 per share,       contained in
any Registration Statement or report filed under the Exchange Act,       including any
amendment or report filed for the purpose of updating such description.
All documents filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective amendment
to this Registration Statement which indicates that all securities offered here have been
sold or which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part of this
Registration Statement from the respective dates of filing of such documents.
Item 4.
Description of Securities.
Not applicable.
Item 5.
Interests of Named Experts and Counsel.
Karen P. Gallivan, Vice
President, General Counsel and Secretary of the Company, has given her opinion about
certain legal matters affecting the shares of the Company's Common Stock registered under
this Registration Statement.  Ms. Gallivan is eligible to participate in the Graco Inc.
2006 Employee Stock Purchase Plan and, as of February 19, 2007, she is the beneficial
owner of 34,375 shares of the Company's Common Stock.
Item 6.
Indemnification of Directors and Officers.
Section 302A.521 of the
Minnesota Business Corporation Act provides that a company shall, subject to certain
limitations, indemnify officers and directors made or threatened to be made a party to a
proceeding by reason of that officer or director's former or present official capacity
with the company.  As required, we will indemnify that person against judgments,
penalties, fines, settlements and reasonable expenses if the officer or director:
•
has not been indemnified by another organization;
•
acted
in good faith;
•
has
not received an improper personal benefit and Section 302A.255 regarding
            director conflicts of interests, if applicable, has been satisfied;
•
assuming
the case is a criminal proceeding, the person had no reasonable cause             to
believe the conduct was unlawful; and
•
reasonably
believed that the conduct was in the best interests of the company             or, in the
case of an officer or director who is or was serving at the request             of the
company as a director, officer, partner, trustee, employee or agent of
            another organization or employee benefit plan, reasonably believed that the
            conduct was not opposed to the best interests of the company.
Article 7 of the
Company's Restated Articles of Incorporation, as amended to date, provides that no
director of the Company shall be personally liable to Graco or its shareholders for
monetary damages for breach of fiduciary duty by such director as a director, provided,
however, that the liability of the director shall not be eliminated or limited (i) for
breach of the director's duty of loyalty to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 302A.559 of the Minnesota Business Corporation
Act or Section 80A.23 of the Minnesota Securities Law or (iv) for any transactions from
which the director derived an improper personal benefit.  Article 7 further provides that
no amendment to or repeal of the Article shall apply to or have any effect on the
liability or alleged liability of any director for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.
Section 8.01 of the
Company's Bylaws provides that the Company shall indemnify its officers and directors
under such circumstances and to the extent permitted by Section 302A.521, as now enacted
or as hereafter amended.
The Company maintains
directors' and officers' liability insurance which covers certain liabilities and
expenses of its directors and officers and covers the Company for reimbursement of
payments to its directors and officers in respect of such liabilities and expenses.
Item 7.
Exemption from Registration Claimed.
Not applicable.
Item 8.
Exhibits.
3.1
Restated
Articles of Incorporation of Graco Inc., as amended September 24, 2004
            (Incorporated by reference to Exhibit 3.1 to the Company's 2004 Annual Report
            on Form 10-K)
4.1
Rights
Agreement dated as of February 25, 2000, between the Company and Wells             Fargo,
formerly known as Norwest Bank Minnesota, National Association, as             Rights
Agent, including as Exhibit A the form of the Certificate of             Designation,
Preferences and Rights of Series A Junior Participating Preferred             Shares.
 (Incorporated  by reference to Exhibit 4 to the Company's Report on             Form 8-K
dated February 25, 2000)
4.2
Credit
Agreement dated April 1, 2006 between the Company and Wachovia Bank,             N.A.
(Incorporated by reference to Exhibit 10.1 to the Company's Report on             Form
 10-Q for the thirteen weeks ending March 31, 2006)
5.1
Opinion
and consent of Karen P. Gallivan, Vice President, General Counsel and
            Secretary of Graco Inc., dated February 22, 2007.
23.1
Consent
of Deloitte & Touche LLP, independent registered public accounting firm.
24.1
Power
of Attorney
Item 9.
Undertakings.
A.
Post-Effective
Amendments.
The undersigned registrant hereby undertakes:
(1)     To
file, during any period in which offers or sales are being made, a       post-effective
amendment to this registration statement:
(a)     To
include any prospectus required by Section 10(a)(3) of the             Securities Act;
(b)         To
reflect in the prospectus  any facts or events arising after the             effective
date of the registration statement (or the most recent post-effective
            amendment thereof) which, individually or in the aggregate, represent a
            fundamental change in the information set forth in the registration
statement.             Notwithstanding the foregoing, any increase or decrease in volume
of securities             offered (if the total dollar value of securities offered would
not exceed that             which is registered) and deviation from the low or high end
of the estimated             maximum offering range may be reflected in the form of
prospectus filed with             the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in             volume and price represent no more than a 20%
change in the maximum aggregate             offering price set forth in the "Calculation
of Registration Fee" table in the             effective registration statement;
(c)     To
include any material information with respect to the plan of             distribution not
previously disclosed in the registration statement or any             material change to
such information in the registration statement;
provided, however,
that paragraphs (i) and (ii) above will not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
that are incorporated by reference in this registration statement.
(2)     That,
for the purpose of determining any liability under the Securities       Act, each such
post-effective amendment shall be deemed to be a new registration       statement
relating to the securities offered therein, and the offering of such       securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3)     To
remove from registration by means of a post-effective amendment any of       the
securities being registered which remain unsold at the termination of the       offering.
B.
Subsequent
Documents Incorporated by Reference.
The undersigned
registrant hereby undertakes that, for purposes of determining       any liability under
the Securities Act, each filing of the registrant's annual report       pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act that is       incorporated
by reference in the registration statement shall be deemed to be a new       registration
statement relating to the securities offered therein, and the offering       of such
securities at that time shall be deemed to be the initial bona fide offering
      thereof.
C.
Claims
for Indemnification.
Insofar
as indemnification for liabilities arising under the Securities Act may       be
permitted to directors, officers and controlling persons of the registrant       pursuant
to the foregoing provisions, or otherwise, the registrant has been advised       that in
the opinion of the Securities and Exchange Commission such indemnification is
      against public policy as expressed in the Act and is, therefore, unenforceable. In
      the event that a claim for indemnification against such liabilities (other than the
      payment by the registrant of expenses incurred or paid by a director, officer or
      other controlling person of the registrant in the successful defense of any action,
      suit or proceeding) is asserted by such director, officer or controlling person in
      connection with the securities being registered, the registrant will, unless in the
      opinion of its counsel the matter has been settled by controlling precedent, submit
      to a court of appropriate jurisdiction the question whether such indemnification by
      it is against public policy as expressed in the Act and will be governed by the
final       adjudication of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota on
the 23rd day of February, 2007.
GRACO INC.
By:
/s/Karen P. Gallivan
Karen P. Gallivan
Vice President, General Counsel
and Secretary
Pursuant
to the requirements of the Securities Act, this Registration Statement has been signed by
the following persons in the capacities and on the date indicated.
Signature
Title
/s/David A. Roberts
Chairman, President and Chief Executive Officer
David A. Roberts
(Principal Executive Officer)
/s/James A. Graner
Chief Financial Officer and Treasurer
James A. Graner
(Principal Financial and Accounting Officer)
David A. Roberts
Director, Chairman of the Board
Robert G. Bohn
Director
William J. Carroll
Director
Jack W. Eugster
Director
J. Kevin Gilligan
Director
Lee R. Mitau
Director
Martha A.M. Morfitt
Director
Mark H. Rauenhorst
Director
William G. Van Dyke
Director
R. William Van Sant
Director
David A. Roberts, by signing his name hereto, does hereby sign this
document on behalf of himself and each of the above named directors of the Registrant
pursuant to powers of attorney duly executed by such persons (set forth in Exhibit 24.1 to
this Registration Statement).
/s/David A. Roberts
David A. Roberts
(For himself and as attorney-in-fact)
Dated:
February 23, 2007
EXHIBIT INDEX
Exhibit Number
Description
Page
3.1
Restated Articles of
                   Incorporation of Graco Inc., as
                   amended September 24, 2004
                   (incorporated by reference to
                   Exhibit 3.1 to the Company's
                   2004 Annual Report on Form 10-K)
4.1
Rights Agreement dated as of
                   February 25, 2000, between the
                   Company and Wells Fargo,
                   formerly known as Norwest Bank
                   Minnesota, National
                   Association, as Rights Agent,
                   including as Exhibit A the form
                   of the Certificate of
                   Designation, Preferences and
                   Rights of Series A Junior
                   Participating Preferred
                   Shares.  (Incorporated by
                   reference to Exhibit 4 to the
                   Company's Report on Form 8-K
                   dated February 25, 2000)
4.2
Credit Agreement dated April 1,
                   2006 between the Company and
                   Wachovia Bank, N.A.
                   (Incorporated by reference to
                   Exhibit 10.1 to the Company's
                   Report on Form 10-Q for the
                   thirteen weeks ending March 31,
                   2006)
5.1
Opinion and Consent of Karen P.
                   Gallivan, Vice President,
                   General Counsel and Secretary
                   of Graco Inc., dated February 22, 2007
23.1
Consent of Deloitte & Touche
                   LLP, independent registered
                   public accounting firm.
24.1
Power of Attorney