HOLD SEPARATE TRUSTEE AGREEMENT 

This Hold Separate Trustee Agreement ("Agreement") entered into by and between 

Graco Inc. ("Respondent") and Thomas R. VerHage (the "Hold Separate Trustee") provides as 

follows: 

WHEREAS, Respondent has executed with the United States Federal Trade Commission 

(the "Commission") an Agreement Containing Consent Orders ("Consent Agreement") 

incorporating a Decision and Order and an Order to Hold Separate and Maintain Assets ("Hold 

Separate Order") (collectively, the "Orders"), which, among other things: (i) require Respondent 

to hold the Hold Separate Business separate, apart and independent from Respondent's other 

businesses; (ii) require Respondent to maintain and assure the continued viability, marketability, 

and competitiveness of the Hold Separate Business; (iii) require Respondent to divest some or all 

of the Liquid Finishing Business Assets as the Commission deems necessary; and (iv) provide 

for the appointment of a Hold Separate Trustee to monitor the operations of the Hold Separate 

Business and ensure Respondent complies with its obligations as required by the Orders; 

WHEREAS, the Commission has appointed Thomas R. VerHage as the Hold Separate 

Trustee pursuant to the Hold Separate Order; 

WHEREAS, the Hold Separate Order further provides that Respondent shall execute a 

Hold Separate Trustee Agreement, subject to the prior approval of the Commission, that transfers 

and confers upon the Hold Separate Trustee all rights, powers, and authority necessary to permit 

the Hold Separate Trustee to perform the Hold Separate Trustee's duties and responsibilities 

pursuant to the Orders; and 

WHEREAS, this Agreement conforms with the requirements of the Orders and does not 

contradict and will not be interpreted or applied in a manner that varies or contradicts the 

requirements of the Orders; and 

WHEREAS, the parties to this Agreement intend to be legally bound, subject only to 

the Commission's approval of this Agreement. 

NOW, THEREFORE, the parties agree as follows: 

I. Defined Terms. Capitalized terms used in this Agreement and not specifically defined 

herein shall have the respective definitions given to them in the Orders. 

2. Hold Separate Trustee's Areas of Responsibility. The Hold Separate Trustee shall 

have all of the powers, responsibilities and protections conferred upon the Hold Separate Trustee 

by the Hold Separate Order, including but not limited to responsibility, consistent with the terms 

of the Orders, for: 

a. monitoring the organization of the Hold Separate Business; 
b. supervising the management of the Hold Separate Business by the Hold Separate 

Managers; 

c. maintaining the independence ofthe Hold Separate Business; and 

d. monitoring Respondent's compliance with its obligations pursuant to the Orders, 

including, without limitation, maintaining the viability, marketability, and 

competitiveness of the Hold Separate Business pending divestiture. 

By the date required by the Hold Separate Order, Respondent shall transfer to the Hold Separate 

Trustee all rights, powers, and authorities necessary to permit the Hold Separate Trustee to 

perform the Hold Separate Trustee's duties and responsibilities pursuant to the Hold Separate 

Order and consistent with the purposes of the Orders. 

3. Access: Subject to all applicable laws and regulations, the Hold Separate Trustee shall 

have full and complete access to all personnel, books, records, documents, and facilities of the 

Hold Separate Business, and to any other relevant information as the Hold Separate Trustee may 

reasonably request, including but not limited to all documents and records kept by Respondent in 

the ordinary course of business that relate to the Hold Separate Business. Respondent shall 

develop such financial or other information as the Hold Separate Trustee may reasonably request 

and shall cooperate with the Hold Separate Trustee. The Hold Separate Trustee shall give 

Respondent reasonable notice of any request for such access or such information. The Hold 

Separate Trustee shall attempt to schedule any access or requests for information in such a 

manner as will not unreasonably interfere with Respondent's operations. At the request of the 

Hold Separate Trustee, Respondent shall promptly arrange meetings and discussions, including 

tours ofrcIcvant facilities, at reasonable times and locations between the Hold Separate Trustee 

and employees of Respondent who have knowledge relevant to the proper discharge of the Hold 

Separate Trustee's responsibilities under the Hold Separate Order. 

4. Hold Separate Trustee's Obligations. The Hold Separate Trustee shall: 

a. carry out the Hold Separate Trustee's duties and responsibilities within the Hold 

Separate Trustee's areas of responsibility set forth in Section 2 above, including 

submission of written reports to the Commission thirty (30) days after the 

Acquisition Date and every thirty (30) days thereafter until the Hold Separate 

Order terminates concerning the efforts to accomplish the purposes of the Hold 

Separate Order and Respondent's compliance with its obligations under the 

Orders. Included within that report shall be the Hold Separate Trustee's 

assessment of the extent to which the businesses comprising the Hold Separate 

Business are meeting (or exceeding) their projected goals as are reflected in 

operating plans, budgets, projections, or any other regularly prepared financial 

statements. 

b. maintain the confidentiality of all confidential information, including Confidential 

Business [nformation and any other information provided to the Hold Separate 

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Trustee by Respondent, any Prospective Acquirer or Commission-approved 

Acquirer of the Held Separate Business or any portion thereof, any supplier or 

customer of the Respondent, or the Commission, and shall use such information 

only for the purpose of performing the Hold Separate Trustee's duties and 

responsibilities as Hold Separate Trustee and not for any other purpose, including, 

without limitation, any other business, technological or personal purpose. The 

Hold Separate Trustee may disclose Confidential Business Information only to: 

1. persons engaged by, employed by or working with the Hold Separate 

Trustee under this Agreement; 

11. any Prospective Acquirer or Commission-approved Acquirer of the Hold 

Separate Business or any part thereof; and 

111. persons employed at the Commission who are working on this matter. 

c. require any consultants, accountants, attorneys, and other representatives and 

assistants retained by the Hold Separate Trustee to assist in carrying out the Hold 

Separate Trustee's duties and responsibilities as Hold Separate Trustee to execute 

a confidentiality agreement that requires such persons to treat confidential 

information, including any Confidential Business Information, with the same 

standards of care and obligations of confidentiality to which the Hold Separate 

Trustee must adhere under this Agreement The Hold Separate Trustee shall 

maintain a record of persons engaged by the Hold Separate Trustee under this 

Agreement to whom Confidential Business Information has been disclosed; 

d. maintain the confidentiality, for a period of five (5) years after the termination of 

this Agreement, of all other aspects of the performance of the Hold Separate 

Trustee's duties and responsibilities under this Agreement, and not disclose any 

contidential or proprietary information relating thereto; and 

e. upon the termination of the Hold Separate Trustee's duties and responsibilities 

under this Agreement, promptly return to Respondent all materials provided to the 

Hold Separate Trustee by Respondent that are confidential and that it is entitled to 

have returned to it under the Orders, and destroy any materials prepared by the 

Hold Separate Trustee that contain or reflect any confidential information of 

Respondent provided that the Commission does not require the Hold Separate 

Trustee to maintain such materials or deliver same to the Commission. 

5. Fees and Expenses. Respondent will pay the Hold Separate Trustee for the performance 

of the Hold Separate Trustee's duties and responsibilities under this Agreement in 

accordance with the fee schedule attached hereto as Confidential Exhibit A. In addition, 

Respondent will: (i) reimburse the Hold Separate Trustee for actual and reasonable preapproved travel expenses (to include airfare, ground transportation, parking, meals and 

lodging) incurred in Lhe performance of the Hold Separate Trustee's duties and 

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responsibilities under this Agreement in accordance with the travel expense 

reimbursement policy attached hereto as Confidential Exhibit B; and (ii) pay all 

reasonable fees and disbursements incurred by such consultants, accountants, attorneys, 

and other representatives and assistants as are reasonably necessary to carry out the Hold 

Separate Trustee's duties and responsibilities under this Agreement. The Hold Separate 

Trustee shall be solely responsible for compliance with all applicable laws, regulations 

and requirements pertaining to work permits, income and social security taxes, 

unemployment insurance, worker's compensation, disability insurance, and the like. 

6. Indemnification. Respondent shall indemnify the Hold Separate Trustee and hold the 

Hold Separate Trustee harmless against any losses, claims, damages, liabilities or 

expenses arising out of, or in connection with, the performance of the Hold Separate 

Trustee's duties, including all reasonable fees of counsel and other expenses incurred in 

connection with the preparation for or defense of any claim, whether or not resulting in 

any liability, except to the extent that such liabilities, losses, damages, claims, or 

expenses result from gross negligence or willful misconduct by the Hold Separate 

Trustee. 

7. Disputes. In the event of a disagreement or dispute between Respondent and the Hold 

Separate Trustee concerning Respondent's obligations under the Hold Separate Order, 

and in the event that such disagreement or dispute cannot be resolved by the parties, 

either party may seek the assistance of the Commission's Compliance Division. 

8. Conflicts ofInterest. Jfthe Hold Separate Trustee becomes aware during the term of 

this Agreement that the Hold Separate Trustee has or may have a conflict of interest that 

may affect or could have the appearance of affecting performance by the Hold Separate 

Trustee of any of the Hold Separate Trustee's duties or responsibilities under this 

Agreement, the Hold Separate Trustee shall promptly inform Respondent and the 

Commission of any such conflict. 

9. Termination. This Agreement shall terminate upon the earlier of: (i) the day after the 

Divestiture Date; (ii) Respondent's receipt of written notice from the Commission that 

the Commission has determined that the Hold Separate Trustee has ceased to act or failed 

to act diligently and consistent with the purposes of the Hold Separate Order, or is 

unwilling or unable to continue to serve as Hold Separate Trustee; and (iii) with at least 

thirty (30) days advance written notice to be provided by the Hold Separate Trustee to 

Respondent and to the Commission, upon resignation of the Hold Separate Trustee. If 

this Agreement is terminated for any reason, the confidentiality obligations set forth in 

this Agreement will remain in full force and effect. 

10. Relationship of Parties. It is understood that the Hold Separate Trustee will be serving 

under this Agreement in a fiduciary capacity for the benefit of the Commission and that 

the relationship of employer and employee shall not exist between the Hold Separate 

Trustee and Respondent. 

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11. Governing Law. This Agreement and the rights and obligations of the parties hereunder 

shall in all respects be governed by the substantive laws of the State of Minnesota, 

including all matters of construction, validity, and performance. The Hold Separate 

Order shall govern this Agreement and any provisions herein which conflict with or are 

inconsistent with the Hold Separate Order may be declared null and void by the 

Commission and any provision not in conflict shall survive and remain a part of this 

Agreement. 

12. Disclosure oflnformation. Nothing in this Agreement shall require Respondent to 

disclose any material information that is subject to a legally recognized privilege or that 

Respondent is prohibited from disclosing by reason of law or an agreement with a third 

party. 

13. Assignment. This Agreement may not be assigned or otherwise transferred by 

Respondent or the Hold Separate Trustee without the prior written consent of the other 

party and the prior approval of the Commission. Any such assignment or transfer shall 

be consistent with the terms of the Hold Separate Order. 

14. Modification. No amendment, modification, termination or waiver of any provision of 

this Agreement shall be effective unless made in writing, signed by all parties, and 

approved by the Commission. Any such amendment, modification, termination or waiver 

shall be consistent with the terms of the Hold Separate Order. 

15. Approval by the Commission. This Agreement shall have no force or effect until 

approved by the Commission. 

16. Entire Agreement. This Agreement, and those portions of the Hold Separate Order 

incorporated herein by reference, constitute the entire agreement of the parties and 

supersedes any and all prior agreements and understandings between the parties, written 

or oral, with respect to the subject matter hereo[ 

17. Notices. All notices permitted or required under this Agreement shall be in writing and 

shall be by personal delivery, a nationally recognized overnight courier service (e.g. 

Federal Express or UPS), e-mail or facsimile transmission, or certified or registered 

United States mail, return receipt requested. Notices shall be deemed given upon actual 

receipt of a personal delivery, the earlier of actual receipt or one (1) day after deposit 

with the courier service, upon receipt by sender of confirmation of any facsimile or email transmission, or five (5) days after deposit with the U.S. Postal Service. Notices 

shall be sent to the addresses listed below, or to such other address as either party may 

specify in writing. 

18. Headings. The headings in the sections of this Agreement are inserted for convenience 

only and shall not affect the meaning or interpretation of this Agreement. 

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19. Severability. If any provision of this Agreement shall be held to be invalid or 

unenforceable, the invalidity or unenforceability of such provision shall not affect the validity 

or enforceability of any of the remaining provisions of this Agreement, and this Agreement 

shall be enforced as if such invalid or unenforceable provision had not been contained 

herein and such invalid or unenforceable provision shall be reformed and enforced to the 

maximum extent permitted under applicable law. 

20. Counterparts. This Agreement may be executed in one or more counterparts, each of 

which shall be deemed to be an original, but all of which together shall constitute one and 

the same instrument. This Agreement may be executed by delivery of a facsimile copy of 

an executed signature page, or delivery via email of PDF or other electronic copy of an 

executed signature page, with the same force and effect as the delivery of an originally 

executed signature page. 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of March _, 

2012. 

HOLD SEPARATE TRUSTEE 

Thomas R. VerHage 

By: __________________ __ 

Address: 

Fax: 

E-Mail: 

6 

RESPONDENT 

Graco Inc. 

By: ____________________ _ 

Name: 

Title: 

Address: 

Fax: 

E-Mail: 
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CONFIDENTIAL EXHIBITS A AND B 

[Redacted From the Public Record Version, But Incorporated By Reference]