GRACO INC. AND SUBSIDIARIES COMPUTATION OF NET EARNINGS PER COMMON SHARE (Unaudited) Thirteen Weeks Ended Twenty Six Weeks Ended -------------------- ---------------------- June 28, 1996 June 30, 1995 June 28, 1996 June 30, 1995 ------------- ------------- ------------- ------------- (In thousands except per share amounts) Net earnings applicable to common stock: Net earnings ............................................ $10,032 $ 8,532 $15,617 $13,968 $10,279 Less dividends on preferred stock ....................... -- 19 -- 37 ------- ------- ------- ------- $10,032 $ 8,513 $15,617 $13,931 ======= ======= ======= ======= Average number of common and common equivalent shares outstanding: Average number of common shares outstanding ................................... 17,349 17,234 17,333 17,180 Dilutive effect of stock options computed on the treasury stock method ......................................... 239 220 238 172 ------- ------- ------- ------- 17,588 17,454 17,571 17,352 ======= ======= ======= ======= Net earnings per common and common equivalent share .......................... $ .57 $ .49 $ .89 $ .80 ======= ======= ======= ======= Primary and fully diluted earnings per share are substantially the same.