UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

            Quarterly Report Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934



For the quarterly period ended September 27, 2002

Commission File Number:  001-9249
                         --------


                                   GRACO INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)




      Minnesota                                        41-0285640
- ------------------------                 ---------------------------------------
(State of incorporation)                 (I.R.S. Employer Identification Number)


        88 - 11th Avenue N.E.
       Minneapolis, Minnesota                                           55413
- ----------------------------------------                              ----------
(Address of principal executive offices)                              (Zip Code)


                                 (612) 623-6000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                    Yes     X         No
                                         ------           -------

           47,611,000 common shares were outstanding as of October 25, 2002.





                           GRACO INC. AND SUBSIDIARIES

                                      INDEX

                                                                     Page Number
                                                                     -----------

PART I   FINANCIAL INFORMATION

         Item 1.  Financial Statements

                     Consolidated Statements of Earnings                       3
                     Consolidated Balance Sheets                               4
                     Consolidated Statements of Cash Flows                     5
                     Notes to Consolidated Financial Statements              6-9

         Item 2.  Management's Discussion and Analysis of
                     Financial Condition and Results of Operations         10-13

         Item 4.  Controls and Procedures                                     14

PART II  OTHER INFORMATION

         Item 4.  Submission of Matters to a Vote of Security
                     Holders                                                  15

         Item 6.  Exhibits and Reports on Form 8-K                            15

SIGNATURES                                                                    16

CERTIFICATIONS                                                             17-19

EXHIBITS

         Separation and Release Agreement between Stephen L.
            Bauman and the Company dated July 25, 2002                Exhibit 10

         Computation of Net Earnings per Common Share                 Exhibit 11

         Certifications  pursuant  to Section 906 of the
            Sarbanes-Oxley  Act of 2002:
               President and Chief Executive Officer                  Exhibit 99
               Vice President and Controller                        Exhibit 99.1
               Vice President and Treasurer                         Exhibit 99.2





                                     PART I

                           GRACO INC. AND SUBSIDIARIES
Item 1.                CONSOLIDATED STATEMENTS OF EARNINGS

                                   (Unaudited)

                     (In thousands except per share amounts)



                                                    Thirteen Weeks Ended              Thirty-nine Weeks Ended
                                                 -----------------------------      ----------------------------
                                                Sept 27, 2002   Sept 28, 2001      Sept 27, 2002   Sept 28, 2001
                                                -------------   -------------      -------------   -------------

                                                                                            
Net Sales                                            $125,832        $118,651           $366,485        $359,338

   Cost of products sold                               60,418          59,495            178,767         180,791
                                                -------------   -------------      -------------   -------------

Gross Profit                                           65,414          59,156            187,718         178,547

   Product development                                  4,813           4,666             13,501          16,664
   Selling, marketing and distribution                 21,426          20,285             63,314          61,398
   General and administrative                           8,438           8,813             24,940          26,106
                                                -------------   -------------      -------------   -------------

Operating Earnings                                     30,737          25,392             85,963          74,379

   Interest expense                                       122             261                382           1,066
   Other expense                                          321             171                525             985
                                                -------------   -------------      -------------   -------------

Earnings Before Income Taxes                           30,294          24,960             85,056          72,328

   Income taxes                                         9,800           8,200             27,500          24,200

Net Earnings                                         $ 20,494        $ 16,760           $ 57,556        $ 48,128
                                                =============   =============      =============   =============

Basic Net Earnings
   Per Common Share                                  $    .43        $    .36           $   1.21        $   1.04
                                                =============   =============      =============   =============

Diluted Net Earnings
   Per Common Share                                  $    .42        $    .35           $   1.19        $   1.02
                                                =============   =============      =============   =============

Cash Dividends Declared
   Per Common Share                                  $    .07        $    .07           $    .22        $    .20
                                                =============   =============      =============   =============



                 See notes to consolidated financial statements.





                           GRACO INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                 (In thousands)

                                                 Sept 27, 2002     Dec 28, 2001
                                                 -------------     ------------
ASSETS
Current Assets
   Cash and cash equivalents                          $ 93,803         $ 26,531
   Accounts receivable, less allowances
      of $5,700 and $4,500                              93,010           85,440
   Inventories                                          28,376           30,333
   Deferred income taxes                                11,768           11,710
   Prepaid expenses                                      1,716            1,483
                                                 -------------     ------------
      Total current assets                             228,673          155,497

Property, Plant and Equipment:
   Cost                                                215,938          211,523
   Accumulated depreciation                           (122,264)        (112,579)
                                                 -------------     ------------
                                                        93,674           98,944

Intangible Assets, net                                  12,411           14,274

Other Assets                                             8,380            7,398
                                                 -------------     ------------
                                                      $343,138         $276,113
                                                 =============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
   Notes payable to banks                             $ 12,626         $  9,512
   Current portion of long-term debt                       500              550
   Trade accounts payable                               13,078           10,676
   Salaries, wages and commissions                      12,634           10,620
   Accrued insurance liabilities                        10,112           10,380
   Accrued warranty and service liabilities              6,287            6,091
   Income taxes payable                                  6,834            6,014
   Other current liabilities                            17,284           19,410
                                                 -------------     ------------
      Total current liabilities                         79,355           73,253

Retirement Benefits and Deferred Compensation           28,260           27,359

Deferred Income Taxes                                    2,096            1,761

Shareholders' Equity
   Common stock                                         47,599           31,113
   Additional paid-in capital                           69,931           54,269
   Retained earnings                                   117,517           89,155
   Other, net                                           (1,620)            (797)
                                                 -------------     ------------
      Total shareholders' equity                       233,427          173,740
                                                 -------------     ------------
                                                      $343,138         $276,113
                                                 =============     ============


                 See notes to consolidated financial statements.




                           GRACO INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)



                                                                      Thirty-nine Weeks
                                                                ------------------------------
                                                                Sept 27, 2002    Sept 28, 2001
                                                                -------------    -------------
Cash Flows from Operating Activities
                                                                                
   Net Earnings                                                       $57,556         $ 48,128
     Adjustments to reconcile net earnings to net
      cash provided by operating activities
        Depreciation and amortization                                  13,876           13,573
        Deferred income taxes                                             344              766
        Tax benefit related to stock options exercised                  3,400                -
        Change in:
          Accounts receivable                                          (5,615)           1,745
          Inventories                                                   2,248           (1,506)
          Trade accounts payable                                        2,299           (2,380)
          Salaries, wages and commissions                               1,830           (4,643)
          Retirement benefits and deferred                               (348)          (1,871)
            compensation
          Other accrued liabilities                                    (2,055)           5,227
          Other                                                           153              526
                                                                -------------    -------------
                                                                       73,688           59,565
                                                                -------------    -------------
Cash Flows from Investing Activities
   Property, plant and equipment additions                             (7,255)         (23,033)
   Proceeds from sale of property, plant and equipment                    284              103
   Acquisition of business, net of cash acquired                            -          (15,949)
                                                                -------------    -------------
                                                                       (6,971)         (38,879)
                                                                -------------    -------------
Cash Flows from Financing Activities
   Borrowings on notes payable and lines of credit                     16,418          148,255
   Payments on notes payable and lines of credit                      (13,771)        (151,365)
   Borrowings on long-term debt                                             -           21,000
   Payments on long-term debt                                             (50)         (38,810)
   Common stock issued                                                 12,114           11,381
   Common stock retired                                                (3,162)          (3,600)
   Cash dividends paid                                                (10,398)          (9,232)
                                                                -------------    -------------
                                                                        1,151          (22,371)
                                                                -------------    -------------
Effect of exchange rate changes on cash                                  (596)           1,045
                                                                -------------    -------------
Net increase (decrease) in cash and cash equivalents                   67,272             (640)

Cash and cash equivalents

   Beginning of year                                                   26,531           11,071
                                                                -------------    -------------
   End of period                                                      $93,803         $ 10,431
                                                                =============    =============



                 See notes to consolidated financial statements.



                           GRACO INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


1.    The  consolidated  balance  sheet  of Graco  Inc.  and  Subsidiaries  (the
      Company) as of September 27, 2002, and the related  statements of earnings
      for the  thirteen  and  thirty-nine  weeks  ended  September  27, 2002 and
      September  28,  2001,  and cash  flows  for the  thirty-nine  weeks  ended
      September  27,  2002 and  September  28,  2001 have been  prepared  by the
      Company without being audited.

      In the opinion of management,  these  consolidated  statements reflect all
      adjustments (consisting of only normal recurring adjustments) necessary to
      present fairly the financial position of Graco Inc. and Subsidiaries as of
      September 27, 2002,  and the results of operations  and cash flows for all
      periods presented.

      Certain  information  and  footnote   disclosures   normally  included  in
      financial  statements  prepared  in  accordance  with  generally  accepted
      accounting  principles  have been condensed or omitted.  Therefore,  these
      statements should be read in conjunction with the financial statements and
      notes thereto included in the Company's 2001 Form 10-K.

      The  results  of  operations  for  interim  periods  are  not  necessarily
      indicative of results that will be realized for the full fiscal year.

2.    Major components of inventories were as follows (in thousands):


                                                   Sept 27, 2002   Dec 28, 2001
                                                   -------------   ------------
      Finished products and components                   $26,025        $23,863

      Products and components in various
         stages of completion                             16,614         18,827

      Raw materials and purchased components              16,519         18,899
                                                   -------------   ------------
                                                          59,158         61,589

      Reduction to LIFO cost                             (30,782)       (31,256)
                                                   -------------   ------------
                                                         $28,376        $30,333
                                                   =============   ============

3.    The  Company  has  three   reportable   segments;   Industrial/Automotive,
      Contractor  and  Lubrication.  The  Company  does not  identify  assets by
      segment.  Sales and  operating  earnings by segment for the  thirteen  and
      thirty-nine  weeks ended September 27, 2002 and September 28, 2001 were as
      follows (in thousands):


                                           Thirteen Weeks Ended                Thirty-nine Weeks Ended
                                      ------------------------------        ------------------------------
                                      Sept 27, 2002    Sept 28, 2001        Sept 27, 2002    Sept 28, 2001
                                      -------------    -------------        -------------    -------------

                                                                                      
      Net Sales

      Industrial/Automotive                $ 52,624         $ 48,583             $149,486         $147,681
      Contractor                             62,990           58,918              182,718          175,595
      Lubrication                            10,218           11,150               34,281           36,062
                                      -------------    -------------        -------------    -------------

      Consolidated                         $125,832         $118,651             $366,485         $359,338
                                      =============    =============        =============    =============

      Operating Earnings

      Industrial/Automotive                $ 14,438         $  2,500             $ 39,398         $ 34,007
      Contractor                             15,412           12,695               43,520           36,852
      Lubrication                             1,869            2,807                7,390            8,835
      Unallocated corporate
         expenses                              (982)          (2,610)              (4,345)          (5,315)
                                      -------------    -------------        -------------    -------------
      Consolidated Operating
         Earnings                          $ 30,737         $ 25,392             $ 85,963         $ 74,379
                                      =============    =============        =============    =============


4.    Total comprehensive  income in 2002 was $20.5 million in the third quarter
      and $57.6 million  year-to-date.  In 2001,  comprehensive income was $17.8
      million for the third quarter and $47.8 million for the nine-month period.
      There have been no significant  changes to the components of comprehensive
      income from those noted on the 2001 Form 10-K except as  described in note
      6 below, with respect to translation gains and losses.

5.    Effective at the beginning of fiscal year 2002, the Company adopted State-
      ment of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
      Intangible  Assets."  Upon  adoption  of  SFAS No.  142,  amortization  of
      goodwill  ceased,  and  results  of  initial goodwill  impairment  testing
      indicated no impairment.  Had SFAS No. 142 been effective at the beginning
      of 2001, the non-amortization provisions would have increased net earnings
      by $140,000 for  the  third quarter  and by $280,000  for the nine  months
      ended September 28, 2001.

      Components of intangible assets were (in thousands):

                                                    Sept 27, 2002   Dec 28, 2001
                                                    -------------   ------------
      Goodwill                                            $ 7,939        $ 7,939

      Other identifiable intangibles, net of
         accumulated amortization of $8,300
         and $6,400                                         4,472          6,335
                                                    -------------   ------------
                                                          $12,411        $14,274
                                                    =============   ============

      Amortization  of intangibles was $598,000 in the third quarter of 2002 and
      $1,864,000  year-to-date.  Estimated  annual  amortization  is as follows:
      $2,400,000 in 2002, $1,600,000 in 2003, $800,000 in 2004, $400,000 in 2005
      and $300,000 in 2006.

6.    During the third quarter of 2001, the Company  announced plans to relocate
      the operations of its German subsidiary,  Graco  Verfahrenstechnik (GV) to
      other Company facilities in Belgium and the U.S. This included termination
      of approximately 50 employees,  termination of leases and consolidation of
      product lines.

      General and administrative expense in the third quarter of 2001 included a
      $1.4 million charge to establish a restructuring accrual for certain costs
      associated with relocating GV operations. Most of the amounts accrued were
      paid  during  the third  quarter of 2002.  As of  September  27,  2002 the
      balance of $100,000  remaining  in the  restructuring  accrual  relates to
      termination of leases, which will be paid by the end of 2002.

      The  economic  facts  and  circumstances  considered  in  determining  the
      functional currency of GV changed as a result of relocating GV operations.
      Consequently,  the Company  determined that the functional  currency of GV
      changed from the euro to the U.S.  dollar.  Effective at the  beginning of
      2002,   adjustments   resulting  from  the  translation  of  GV  financial
      statements  into  U.S.  dollars  are no  longer  charged  or  credited  to
      shareholders' equity, but are now included in other expense (income).

7.    Statement of Financial  Accounting  Standards (SFAS) No. 144,  "Accounting
      for the Impairment or Disposal of Long-Lived Assets" was effective for the
      Company at the beginning of fiscal year 2002. This standard provides for a
      single  accounting  model to be used for long-lived  assets to be disposed
      of, and broadens the  presentation of  discontinued  operations to include
      more disposal transactions.  The adoption of SFAS No. 144 had no effect on
      the Company's 2002 financial position or operating results.

8.    On May 7, 2002, the Board of Directors  declared a three-for-two  split of
      the Company's common stock, distributed on June 6, 2002 to shareholders of
      record  on  May 21, 2002.  Share  and per share  amounts  for all  periods
      presented reflect the stock split.

      Also on May 7, 2002, the Company issued 36,750 shares of restricted common
      stock to key employees under the Stock Incentive Plan.  Compensation  cost
      totaling  $1,069,000  related to the restricted  shares will be charged to
      operations over the three-year vesting period.


Item 2.                   GRACO INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations
- ---------------------

Increased  sales and improved  gross profit rate resulted in higher net earnings
for the third  quarter.  Year-to-date,  sales and gross  profit  rate are up and
expenses are down. Resulting net earnings increased by 20% over last year.

The following table sets forth items from the Company's Consolidated  Statements
of Earnings as percentages of net sales:



                                                Thirteen Weeks Ended               Thirty-nine Weeks Ended
                                            -----------------------------       -----------------------------
                                            Sept 27, 2002   Sept 28, 2001       Sept 27, 2002   Sept 28, 2001
                                            -------------   -------------       -------------   -------------
                                                                                            
Net Sales                                           100.0%          100.0%              100.0%          100.0%

Cost of products sold                                48.0            50.1                48.8            50.3

Product development                                   3.8             4.0                 3.7             4.6

Selling, marketing and distribution                  17.1            17.1                17.2            17.1

General and administrative                            6.7             7.4                 6.8             7.3
                                            -------------   -------------       -------------   -------------
Operating Earnings                                   24.4            21.4                23.5            20.7

Interest expense                                      0.1             0.2                 0.1             0.3

Other expense                                         0.2             0.2                 0.2             0.3
                                            -------------   -------------       -------------   -------------
Earnings Before Income Taxes                         24.1            21.0                23.2            20.1

Income taxes                                          7.8             6.9                 7.5             6.7
                                            -------------   -------------       -------------   -------------
Net Earnings                                         16.3%           14.1%               15.7%           13.4%
                                            =============   =============       =============   =============


Net Sales

Sales by segment were as follows (in thousands):


                               Thirteen Weeks Ended             Thirty-nine Weeks Ended
                           -----------------------------     -----------------------------
                           Sept 27, 2002   Sept 28, 2001     Sept 27, 2002   Sept 28, 2001
                           -------------   -------------     -------------   -------------

                                                                      
Industrial/Automotive           $ 52,624        $ 48,583          $149,486        $147,681
Contractor                        62,990          58,918           182,718         175,595
Lubrication                       10,218          11,150            34,281          36,062
                           -------------   -------------     -------------   -------------

Consolidated                    $125,832        $118,651          $366,485        $359,338
                           =============   =============     =============   =============


Sales for the quarter in the Industrial/Automotive  segment were higher than the
prior  year for the first time  since the  second  quarter of 2000.  Much of the
sales  growth in that segment  came from the Asia  Pacific  region,  mostly from
China.  Sales in the home center channel of the Contractor  segment continued to
show  strong  increases  over  the  prior  year,  accounting  for  most  of  the
year-to-date sales increase in the Contractor segment.  Sales in the Lubrication
segment continued to trail last year's sales,  which included large sales to key
customers.

Sales by geographic area were as follows (in thousands):

                       Thirteen Weeks Ended           Thirty-nine Weeks Ended
                   -----------------------------    ----------------------------
                   Sept 27, 2002   Sept 28, 2001    Sept 27, 2002   Sept 28,2001
                   -------------   -------------    -------------   ------------

Americas                $ 89,654        $ 86,513         $265,452       $262,601
Europe                    21,793          20,851           64,537         62,430
Asia Pacific              14,385          11,287           36,496         34,307
                   -------------   -------------    -------------  -------------

Consolidated            $125,832        $118,651         $366,485       $359,338
                   =============   =============    =============  =============

For the third  quarter,  the  strengthening  of the euro versus the dollar had a
favorable  effect - sales in Europe  increased  5 percent  but would have been 5
percent  lower  than last  year if  translated  at  consistent  exchange  rates.
Year-to-date,  sales in Europe  increased  3 percent but would have been flat if
translated at  consistent  exchange  rates.  The  year-to-date  increase in Asia
Pacific sales would not be  significantly  different if translated at consistent
exchange rates.

Gross Profit

Price increases,  changes in exchange rates and  manufacturing  cost improvement
activities  all  contributed  to higher gross profit rates  compared to the same
periods  last year.  Changes in  exchange  rates have less impact on the cost of
products  sold than on sales  because  most  product  costs are incurred in U.S.
dollars, which had the effect of increasing gross profit rate in 2002.

Operating Expenses

Product  development  expenses for the quarter were up slightly  from last year,
but year-to-date  expenses decreased due to actions taken during 2001.  Selling,
marketing and  distribution  expenses  were higher  compared to last year due in
part  to  increased  sales  incentives  and  marketing  programs.   General  and
administrative  expenses  included a $1.4  million  restructuring  charge in the
third  quarter  of  2001.  Excluding  the  restructuring  charge,   general  and
administrative  expenses  increased  compared  to last year due in large part to
higher sales and earnings-based incentive accruals.

Year-to-date  operations  include a $.8 million  pension  credit  related to the
Company's U.S.  defined benefit pension plan,  compared to a $2.5 million credit
in the same  period  last year.  These  credits  resulted  from  recognition  of
investment gains  attributable to pension plan assets,  and are included in cost
of products  sold and  operating  expenses  based on salaries  and wages.  Other
payroll related expenses including medical and workers'  compensation costs have
increased in 2002 and are also  included in cost of products  sold and operating
expenses based on salaries and wages.

Interest Expense and Other Expense

Interest  expense  decreased  due to reduced  debt  levels and  interest  income
(included  in Other  Expense)  increased  due to  higher  interest-bearing  cash
balances.

Liquidity and Capital Resources
- -------------------------------

Cash  generated  from  operations in the first nine months of 2002 resulted in a
$67 million increase in cash and cash equivalents. Accounts receivable increased
in 2002 due to extended  terms on selected  accounts and higher sales.  In 2001,
significant  uses of cash included the  construction of expanded  manufacturing,
warehouse and office facilities in Minneapolis, Minnesota and Sioux Falls, South
Dakota, the acquisition of ASM, and reduction of debt.

The Company had unused lines of credit  available at September 27, 2002 totaling
$19 million.  During the third  quarter,  the Company  terminated  its revolving
credit  facility  with U.S.  Bank National  Association  as the lead bank.  Cash
balances of $94 million at September 27, 2002,  internally  generated  funds and
available  credit lines  provide the Company with the financial  flexibility  to
meet liquidity needs.

Outlook

Management expects modest growth in its served markets for the remainder of 2002
and into 2003.  The  Contractor  Equipment  segment  continues to benefit from a
strong housing  market in North America and the Industrial / Automotive  segment
is well  positioned  to post higher  sales and profits  with a recovery in North
American capital equipment spending.  While the Company continues to obtain cost
and expense savings through process improvements,  year-over-year cost pressures
in areas such as insurance and pension expenses are expected to continue for the
rest of 2002 and into 2003.  With all of these  factors in mind,  management  is
planning for higher sales and improved  profitability  for the remainder of 2002
and in 2003.  The  Company  continues  to make  substantial  investments  in its
strategies including introducing new products,  entering new markets,  expanding
distribution  coverage  and other  initiatives  that  support the  objective  of
delivering sustained long-term profitable growth.

SAFE HARBOR CAUTIONARY STATEMENT

A  forward-looking  statement  is any  statement  made in this  report and other
reports that the Company files  periodically  with the  Securities  and Exchange
Commission,  as well as in press or earnings  releases,  analyst  briefings  and
conference calls, which reflects the Company's current thinking on market trends
and the Company's  future  financial  performance at the time they are made. All
forecasts and projections are forward-looking statements.

The Company  desires to take  advantage of the "safe  harbor"  provisions of the
Private Securities Litigation Reform Act of 1995 by making cautionary statements
concerning any  forward-looking  statements made by or on behalf of the Company.
The  Company  cannot  give any  assurance  that the  results  forecasted  in any
forward-looking statement will actually be achieved. Future results could differ
materially  from  those  expressed,  due to the  impact of  changes  in  various
factors. These risk factors include, but are not limited to: economic conditions
in the United  States and other major world  economies,  currency  fluctuations,
political instability,  changes in laws and regulations,  and changes in product
demand.  Please refer to Exhibit 99 to the Company's  Annual Report on Form 10-K
for fiscal year 2001 for a more comprehensive discussion of these and other risk
factors.

Item 4.                   CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures
- ------------------------------------------------

Within the 90 days prior to the filing date of this report,  the Company carried
out an  evaluation  of the  effectiveness  of the  design and  operation  of its
disclosure  controls and procedures  pursuant to Exchange Act Rule 13a-14.  This
evaluation  was done under the  supervision  and with the  participation  of the
Company's President and Chief Executive Officer,  Vice President and Controller,
Vice President and Treasurer, and Vice President, General Counsel and Secretary.
Based  upon  that  evaluation,  they  concluded  that the  Company's  disclosure
controls and  procedures  are effective in gathering,  analyzing and  disclosing
information  needed to satisfy the Company's  disclosure  obligations  under the
Exchange Act.

Changes in internal controls
- ----------------------------

There were no significant changes in the Company's internal controls or in other
factors that could  significantly  affect those  controls  since the most recent
evaluation of such controls.



PART II

Item 4.     Submission of Matters to a Vote of Security Holders

            None

Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibits

                  10    Separation  and  Release  Agreement  between  Stephen L.
                        Bauman and the Company dated July 25, 2002

                  11    Computation of Net Earnings per Common Share

                  99    Certification of  President and  Chief Executive Officer
                        pursuant  to Section 906  of the  Sarbanes-Oxley  Act of
                        2002

                  99.1  Certification of  Vice President and Controller pursuant
                        to Section 906 of the Sarbanes-Oxley Act of 2002

                  99.2  Certification of  Vice President and Treasurer  pursuant
                        to Section 906 of the Sarbanes-Oxley Act of 2002

            (b)   No reports on Form 8-K have been filed  during the quarter for
                  which this report is filed.



                                   SIGNATURES


Pursuant  to the  requirements  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.



                                           GRACO INC.




Date:  October 31, 2002                    By: /s/David A. Roberts
       --------------------------------        ---------------------------------
                                               David A. Roberts
                                               President and Chief Executive
                                                  Officer




Date:  October 31, 2002                    By: /s/James A. Graner
       --------------------------------        ---------------------------------
                                               James A. Graner
                                               Vice President and Controller





Date:  October 31, 2002                    By: /s/Mark W. Sheahan
       --------------------------------        ---------------------------------
                                               Mark W. Sheahan
                                               Vice President and Treasurer



                                 CERTIFICATIONS

I, David A. Roberts, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Graco Inc.;

2.   Based on my knowledge,  this  quarterly  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 quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared.

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of registrant's board of directors:

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date: October 31, 2002                        /s/David A. Roberts
      --------------------------------        ----------------------------------
                                              David A. Roberts
                                              President and Chief Executive
                                                 Officer


                                 CERTIFICATIONS

I, James A. Graner, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Graco Inc.;

2.   Based on my knowledge,  this  quarterly  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 quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared.

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of registrant's board of directors:

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date: October 31, 2002                        /s/James A. Graner
      --------------------------------        ----------------------------------
                                              James A. Graner
                                              Vice President and Controller


                                 CERTIFICATIONS

I, Mark W. Sheahan, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Graco Inc.;

2.   Based on my knowledge,  this  quarterly  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 quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared.

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of registrant's board of directors:

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date: October 31, 2002                        /s/Mark W. Sheahan
      --------------------------------        ----------------------------------
                                              Mark W. Sheahan
                                              Vice President and Treasurer