Company: GGG
Filing Date: 2025-03-12
Form Type: DEF 14A
Source: 0001193125-25-052581
Chunk: 33

Company: GRACO INC
Filing Date: 2025-03-12
Form: DEF 14A
Chunk 33
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 meeting in February 2024, the MOCC approved participation of our CEO and other executive officers in the Incentive Bonus Plan for 2024. The threshold, target and maximum payout levels as a percent of target and as a percent of base salary for 2024 are displayed below. Achievement of performance levels between threshold and target, and target and maximum, result in a payout that is interpolated based on the level of performance, and permit a partial payout as soon as the threshold level of achievement has been exceeded.**

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Graco Inc. 2025 Proxy Statement</div>

The MOCC established two financial measures for the Incentive Bonus Plan: Net Sales and Incentive EPS growth over the prior year, weighted 40% Net Sales and 60% Incentive EPS. Net Sales and Incentive EPS growth were selected as the metrics against which to measure the executive officers’ performance for the Incentive Bonus Plan because the MOCC desires to motivate the executive officers to achieve profitable business growth consistent with our long-term financial objectives. The MOCC utilized projected global gross domestic product (GDP) growth rates as a guide in setting the 2024 target performance levels. At the time the MOCC established the 2024 target performance levels, the MOCC once again determined that final bonus payout calculations for corporate, worldwide division and region Incentive EPS would exclude certain purchase accounting and one-timetransaction costs related to acquisitions and divestitures, the initial valuation of acquisitions and potential earn out adjustments, and the effects of excess tax benefits from stock option exercises. Final corporate, worldwide division and region Incentive EPS calculations for 2024 bonus payouts excluded these items. The MOCC believes these adjustments provide a better measure of operating performance for 2024. In addition to these recurring adjustments, the MOCC has the authority to adjust Incentive Bonus Plan awards based on unanticipated or special circumstances, but no such adjustments were made for 2024. Incentive EPS is $2.75, which is $0.02 lower than our externally reported adjusted EPS due to acquisition related expenses that are part of recurring adjustments. No adjustments were made to the Incentive EPS calculation for business reorganization purposes of approximately $0.03 per share. The 2024 Incentive Bonus Plan award payouts were based upon the achievement of specified levels of Net Sales and Incentive EPS at the corporate, worldwide divisional and regional levels. Financial performance levels and actual results