Document:

Exhibit

SEVENTH AMENDMENT 
GRACO RESTORATION PLAN 
(2005 Restatement)
Graco Inc. has established and maintains a nonqualified deferred compensation plan (the “Plan”) which, in its most recent amended and restated form, is embodied in a document entitled “GRACO RESTORATION PLAN (2005 Restatement),” effective January 1, 2005 (as amended, the “Plan Statement”).  The amendment to the Plan set forth below is not intended to make any change in the documentation or operation of the Plan that would cause a violation of section 409A of the Internal Revenue Code or its accompanying regulations.  If any change that occurs as a result of this amendment is determined to be a violation of section 409A, this amendment shall be ineffective and shall be disregarded in the administration of the Plan.  Subject to the limitation stated above, the Plan is hereby amended as follows:
1.DEATH BENEFITS.  Effective January 1, 2019, Section 4.3 of the Plan Statement is amended to read as follows:
4.3.    Death Benefits    .  See Section 7.1.4 of the Plan.
2.    DISTRIBUTION – DEFAULT TIME OF DISTRIBUTION.  Effective January 1, 2019, Section 7.1.1(a) of the Plan Statement is amended to read as follows:
		
	(a)
	Default Time of Distribution.  The time of distribution listed below applies if the Participant has not made an election for an alternative time of distribution.

		
	(i)
	Participant is Alive at Commencement.  A Participant’s benefit shall commence as of the first day of the month after the later of the date (i) the Participant attains age 62, or (ii) the Participant has a Separation from Service.

		
	(ii)
	Participant’s Death Before Commencement.  A Participant’s benefit (if any) shall commence as of the first day of the month after the later of the date (i) the Participant would have attained age 62 (if the Participant had not died), or (ii) the Participant has a Separation from Service.  See also Section 7.1.4.

3.    FORM OF DISTRIBUTION – DEFAULT FORM OF DISTRIBUTION.  Effective January 1, 2019, Section 7.1.2(a) of the Plan Statement is amended to read as follows:
		
	(a)
	Default Form of Distribution.  The form of distribution listed below applies if the Participant has not made an election for an alternative form of distribution.

		
	(i)
	Participant is Alive at Commencement.  If a Participant is married at the time distribution of a Participant’s benefit is to commence and the Participant has not made an election as to a form of distribution, a Participant’s benefit shall be paid in the form of a Fifty Percent (50%) Qualified Joint and Survivor Annuity (a joint and survivor annuity paid over the life of the Participant and the annuity reduced and 50% of the annuity paid to the spouse after the Participant’s death if the spouse survives the Participant, although the annuity shall not be subject to the rules governing qualified joint and survivor annuities under the Code).  If a Participant is single at the time distribution of a Participant’s benefit is to commence and the Participant has not made an election as to a form of distribution, a Participant’s benefit shall be paid in the form of a Single Life Annuity.

		
	(ii)
	Participant’s Death Before Commencement.  If a Participant is married and dies before distribution of the Participant’s benefit is to commence, and the Participant has not made an election as to a form of distribution, then a Participant’s benefit shall be paid to the Participant’s spouse as the survivor annuity portion of a Fifty Percent (50%) Qualified Joint and Survivor Annuity (a joint and survivor annuity paid over the life of the Participant and the annuity reduced and 50% of the annuity paid to the spouse after the Participant’s death if the spouse survives the Participant, although the annuity shall not be subject to the rules governing qualified joint and survivor annuities under the Code).  If a Participant dies before distribution of the Participant’s benefit is to commence, the Participant is single, and the Participant has not made an election as to a form of distribution, then no benefit will be paid under the Plan.  See also Section 7.1.4.

4.    ELECTION TO CHANGE THE FORM OR DELAY THE TIME OF DISTRIBUTION.  Effective January 1, 2019, Section 7.1.2(b) of the Plan Statement is amended to read as follows:
		
	(b)
	Election to Change the Form or Delay the Time of Distribution.  A Participant may make an election to change the form or delay the time of distribution.

		
	(i)
	Change from One Annuity to Another Annuity Form of Distribution.  If a Participant’s form of distribution before the change is an annuity form of distribution, the Participant may change the annuity form of distribution to another annuity form of distribution that is actuarially equivalent applying reasonable actuarial methods and assumptions.  This election to change the annuity form of distribution is to be made at least thirty (30) days before the annuity distribution is to commence.  A change in annuity form of distribution under this provision shall not change the annuity commencement date (if a Participant wants to delay the annuity commencement date, the Participant must make an election under Section 7.1.2(b)(ii)).

		
	(ii)
	Delay in Annuity Commencement Date.  If a Participant’s form of distribution before an election is an annuity form of distribution, the Participant may delay the annuity commencement date.  This election to delay the annuity commencement date (i) shall not take effect until the date that is twelve (12) months after the date on which the Participant makes the election, (ii) for an annuity to commence on a specified date (but not upon a Participant’s Separation from Service, Disability, or death), must be made at least twelve (12) months before the annuity commencement date in place before the election, and (iii) must delay the annuity commencement date by at least five (5) years (the new annuity commencement date must be at least five (5) years after the annuity commencement date in place before the election to delay distribution).  An election form that does not satisfy the requirements of the preceding sentence shall be void and shall be disregarded.  In all cases an election form shall not be considered filed until the completed form is actually received by the Committee or its designated agent.

		
	(iii)
	Change from a Lump Sum to an Annuity Form of Distribution or from an Annuity to a Lump Sum Form of Distribution.  If a Participant wants to change the Participant’s form of distribution from a lump sum distribution to an annuity distribution or from an annuity distribution to a lump sum distribution, the requirements of this Section 7.1.2(b)(iii) shall apply.  The election to change a lump sum distribution to an annuity distribution (i) shall not take effect until the date that is twelve (12) months after the date on which the Participant makes the election, (ii) for a lump sum distribution to be paid on a specified date (but not upon a Participant’s Separation from Service, Disability, or death), must be made at least twelve (12) months before the lump sum distribution date in place before the election, and (iii) must delay the commencement date by at least five (5) years (the annuity commencement date must be at least five (5) years after the lump sum distribution date in place before the election to change the form of distribution).  The election to change an annuity distribution to a lump sum distribution (i) shall not take effect until the date that is twelve (12) months after the date on which the Participant makes the election, (ii) for an annuity to commence on a specified date (but not upon a Participant’s Separation from Service, Disability, or death), must be made at least twelve (12) months before the annuity commencement date in place before the election, and (iii) must delay the commencement date by at least five (5) years (the lump sum distribution date must be at least five (5) years after the annuity commencement date in place before the election to change the form of distribution).  An election form that does not satisfy the requirements of the preceding sentences shall be void and shall be disregarded.  In all cases an election form shall not be considered filed until the completed form is actually received by the Committee or its designated agent.

		
	(iv)
	Delay in Lump Sum Distribution Date.  If a Participant’s form of distribution before an election is a lump sum form of distribution, the Participant may delay the lump sum distribution date.  This election to delay the lump sum distribution date (i) shall not take effect until the date that is twelve (12) months after the date on which the Participant makes the election, (ii) for a lump sum distribution to be paid on a specified date (but not upon a Participant’s Separation from Service, Disability, or death), must be made at least twelve (12) months before the lump sum distribution date in place before the election, and (iii) must delay the lump sum distribution date by at least five (5) years (the new lump sum distribution date must be at least five (5) years after the lump sum distribution date in place before the election to delay distribution).  An election form that does not satisfy the requirements of the preceding sentence shall be void and shall be disregarded.  In all cases an election form shall not be considered filed until the completed form is actually received by the Committee or its designated agent.

5.    ALTERNATE FORMS OF DISTRIBUTION.  Effective January 1, 2019, Section 7.1.2(c) of the Plan Statement is amended to read as follows:
		
	(c)
	Alternate Forms of Distribution.  Subject to satisfying the conditions in Section 7.1.2(b), the Participant may elect to receive distribution in one of the following forms:

		
	(i)
	Retirement Plan Forms of Distribution.  The forms of distribution specified under Section 3.4.2 of the Graco Employee Retirement Plan – Blue.  These are:

		
	(A)
	Single Life Annuity.

		
	(B)
	Ten (10) Year Certain and Life Annuity.

		
	(C)
	Fifteen (15) Year Certain and Life Annuity.

		
	(D)
	Fifty Percent (50%) Qualified Joint and Survivor Annuity.

		
	(E)
	Sixty‐Six and Two‐Thirds Percent (66‐2/3%) Qualified Joint and Survivor Annuity.

		
	(F)
	Seventy‐Five Percent (75%) Qualified Joint and Survivor Annuity.

		
	(G)
	One Hundred Percent (100%) Qualified Joint and Survivor Annuity.

		
	(H)
	Fifty Percent (50%) Joint and Survivor Annuity.

		
	(I)
	Sixty‐Six and Two‐Thirds Percent (66‐2/3%) Joint and Survivor Annuity.

		
	(J)
	Seventy‐Five Percent (75%) Joint and Survivor Annuity.

		
	(K)
	One Hundred Percent (100%) Joint and Survivor Annuity.

		
	(ii)
	Lump Sum Payment.  A single lump sum payment.

6.    IMPACT OF DEATH ON DISTRIBUTION.  Effective January 1, 2019, Section 7.1.4 of the Plan Statement is amended to read as follows:
7.1.4.    Impact of Participant’s Death on Distribution.
		
	(a)
	Death Prior to Commencement.

		
	(i)
	Single Life Annuity.  If the Participant’s form of distribution based on default or the Participant’s election prior to death is a Single Life Annuity, no benefit will be paid after the Participant’s death.

		
	(ii)
	Term Certain and Life Annuity.  If the Participant’s form of distribution based on the Participant’s election prior to death is a Ten (10) Year Certain and Life Annuity or a Fifteen (15) Year Certain and Life Annuity, after the Participant’s death the monthly benefit will be paid for ten (10) years or fifteen (15) years (as applicable) to the Participant’s Beneficiary.

		
	(iii)
	Qualified Joint and Survivor Annuity or Joint and Survivor Annuity.  If the Participant’s form of distribution based on default or the Participant’s election prior to death is a Qualified Joint and Survivor Annuity or a Joint and Survivor Annuity, after the Participant’s death the applicable survivor benefit will be paid for the life of the spouse or Joint Annuitant (as applicable).  Notwithstanding the foregoing, if the Participant’s spouse or Joint Annuitant (as applicable) does not survive the Participant, no survivor benefit will be paid.

		
	(iv)
	Lump Sum Payment.  If the Participant’s form of distribution based on the Participant’s election prior to death is a single lump sum, after the Participant’s death the single lump sum will be paid to the Participant’s Beneficiary.

		
	(b)
	Death After Commencement.

		
	(i)
	Single Life Annuity.  If the Participant’s form of distribution based on default or the Participant’s election prior to death is a Single Life Annuity, no benefit will be paid after the Participant’s death.

		
	(ii)
	Term Certain and Life Annuity.  If the Participant’s form of distribution based on the Participant’s election prior to death is a Ten (10) Year Certain and Life Annuity and the Participant dies before ten (10) years of monthly distributions have been made, then after the Participant’s death monthly distributions will be paid to the Participant’s Beneficiary until the total period of distributions to the Participant and the Beneficiary total ten (10) years of monthly distributions.  If the Participant’s form of distribution based on the Participant’s election prior to death is a Ten (10) Year Certain and Life Annuity and the Participant dies after ten (10) years of monthly distributions have been made, no further benefit will be paid because the ten (10) years of monthly distributions will have already been paid.  If the Participant’s form of distribution based on the Participant’s election prior to death is a Fifteen (15) Year Certain and Life Annuity and the Participant dies before fifteen (15) years of monthly distributions have been made, then after the Participant’s death monthly distributions will be paid to the Participant’s Beneficiary until the total period of distributions to the Participant and the Beneficiary total fifteen (15) years of monthly distributions.  If the Participant’s form of distribution based on the Participant’s election prior to death is a Fifteen (15) Year Certain and Life Annuity and the Participant dies after fifteen (15) years of monthly distributions have been made, no further benefit will be paid because the fifteen (15) years of monthly distributions will have already been paid.

		
	(iii)
	Qualified Joint and Survivor Annuity or Joint and Survivor Annuity.  If the Participant’s form of distribution based on default or the Participant’s election prior to death is a Qualified Joint and Survivor Annuity or a Joint and Survivor Annuity, after the Participant’s death the applicable survivor benefit will be paid for the life of the spouse or Joint Annuitant (as applicable).  Notwithstanding the foregoing, if the Participant’s spouse or Joint Annuitant (as applicable) does not survive the Participant, no survivor benefit will be paid.

		
	(iv)
	Lump Sum Payment.  If the Participant’s form of distribution based on the Participant’s election prior to death is a single lump sum, no further benefit will be paid because the single lump sum will have already been paid.

		
	(c)
	No Changes to Time and Form of Payment.  Once benefits commence, neither the Participant nor the Participant’s spouse, Joint Annuitant, Beneficiary or any other party may change the time and form of distribution.  If a Participant dies, neither the Participant’s spouse, Joint Annuitant, Beneficiary nor any other party may change the time and form of distribution.  Once benefits have commenced, the remainder of the undistributed benefit shall be distributed in the form commenced before the Participant’s death. 

7.    DESIGNATION OF BENEFICIARIES – RIGHT TO DESIGNATE.  Effective January 1, 2019, the last sentence of Section 7.2.1 of the Plan is deleted.
8.    SAVINGS CLAUSE.  Save and except as hereinabove expressly amended, the Plan Statement shall continue in full force and effect.ggg12282018exhibit122

                           GRACO INC.                       RETIREMENT PLAN FOR                      NON-EMPLOYEE DIRECTORS           GRACO INC. ("Graco"), a Minnesota corporation, hereby establishes a Retirement Plan for Non-employee Directors (the "Plan") for the benefit of certain members of the Board of Directors of Graco as defined herein, and upon the terms and conditions set forth below.              Effective Date.  The Plan is effective November I, 1988.          2. Eligibility. A member of the Board of Directors of Graco is eligible for the retirement benefits provided herein if:          (a) He or she is not an employee of Graco at the time              of retirement from the Board of Directors, and          (b) He or she has at least five (5) full years of              service as a director of Graco (whether or not              consecutive) and, during that entire time, was              not an employee of Graco, and          (c) He or she retires after November i, 1988.  Years of service as a director shall be measured by the twelve (12) consecutive month period beginning with the date the individual first becomes a non-employee director of Graco and all twelve (12) consecutive month periods beginning on the annual anniversary of such date (irrespective of any termination of membership and subsequent reinstatement). An individual who is eligible for retirement benefits is referred to as a "Participant."         3.    Payments upon Retirement.      Upon retirement, payments will be made as follows:         3.1. Commencement.    Payments will commence on the              quarterly payment date immediately following the              date of the Participant’s retirement.    The              quarterly payments date means the date on which              regular quarterly payments are made to active              members of the Board of Directors.         3.2  Amount.    Each payment shall be equal to              one-fourth (I/4th) of the annual amount being 

 

               paid to the Participant for service as a member                of the Board of Directors immediately before his                or her retirement.            3.3. Frequency. After commencement, payments shall be                made on the same quarterly dates as regular                payments are made to active members of the Board                of Directors of Graco.           3.4. Duration. Payments shall continue for five (5)                years (this is, until a total of twenty (20)                quarterly payments have been made).    If the                Participant dies after payments have commenced                but before all payments have been made, the                remaining payments shall be made on the next                regular payment date in one lump sum to the                beneficiary or beneficiaries designated by the                Participant who survive the Participant. If no                beneficiary survives the Participant, payment                shall be made to the Participant’s estate.           4.    Payments Upon Death Before Retirement.    If a Participant dies before retirement but at a time when the Participant would have been eligible for payments hereunder had such Participant retired on the date of his or her death, then payment shall be made to such Participant’s beneficiary as follows:          4.1.  Amount. Payment shall be made in one lump sum in                an amount equal to the total amount of the                payments that would have been made to the                Participant had he or she retired on the date of                his or her death and survived to the date of the                final payment.          4.2.  Date of Payment. Payment shall be made as soon                as reasonably practical but in all events on or                before the date six (6) months after the date of                Participant’s death.          5.    Definitions.    For purposes    of this Plan, the following definitions shall apply:          5.1.  Retirement.      "Retirement"    shall    mean    any               voluntary or involuntary termination of the               Participant as a member of the Board of Directors                of Graco, at any age. 

 

          5.2. Employee.    "Employee" shall mean any person who                 receives    compensation from Graco which is                 reportable   on IRS Form W-2 (or any successor                 form). In determining whether an individual is                 an employee during any particular calendar year,                 compensation received during that year for                 services performed in a previous year (for                 example, bonus payments) shall be disregarded.           5.3.  Non-employee.     "Non-employee" shall mean        any                 person who is not considered an employee.           6. Source of Payments. Payments due under this Plan  shall be paid out of the general corporate funds of Graco, and  Participants and beneficiaries shall not have any preferred  interest by way of trust, escrow, lien or otherwise in any  specific assets.    The rights accruing to Participants and beneficiaries hereunder shall be solely those of unsecured  creditors of Graco.           7.       Nontransferability.         Participants        and beneficiaries shall not have the right to assign, encumber or  otherwise anticipate the payments to be made under this Plan,  and the payments provided hereunder shall not be subject to  seizure for payment of any debts or judgments against any Participant or any beneficiary.           8.    Tax Withholding.    Graco may deduct from any payment (and transmit to the proper taxing authority) such  amount as it may be required to withhold under any applicable federal, state or other law.           9. Beneficiaries. Each Participant may designate one or more beneficiaries who, upon death, are to receive the amounts that otherwise would have been paid to the Participant, and may change or revoke any such designation from time to time. No such designation, change or revocation shall be effective unless executed by the Participant and received by Graco during the Participant’s lifetime.     Unless the Participant has otherwise specified in the beneficiary designation, the beneficiary or beneficiaries so designated shall become fixed as of death so that, if a beneficiary survives the Participant but dies before the receipt of the payment due such beneficiary, such payment shall be payable to such beneficiary’s estate.           If a Participant does not designate a beneficiary pursuant to this section, or if for any reason such designation is ineffective, in whole or in part, then the amounts that                                    -3- 

 

 otherwise would have been paid to such Participant (or the part  thereof as to which the designation is ineffective, as the case  may be) shall be paid to such Participant’s estate and, in such  event, the term ~’beneficiary" shall include such estate.             I0. ApDlicability to Successors.       This Plan shall be  binding upon and inure to the benefit           of Graco and each  Participant, the successors and assigns         of Graco,    and the  beneficiaries, personal representatives        and heirs    of each  Participant.    If Graco becomes a party to anymerger,  consolidation or reorganization, this Plan shall remain in full  force and effect as an obligation of Graco or its successors in  interest.            ll. Amendment. This Plan may be amended or revoked  at any time by the Board of Directors of Graco, but no such  amendment shall have the effect of reducing the amount which would be due or could be earned by any person then serving on  the Board of Directors of Graco without the consent of such person. Graco is authorized to issue implementing rules(not  Inconsistent with this Plan).     Graco will informthe  Participants of any rules, amendments or revocation ofthis Plan.           12. ApDlicable Law. This Plan shall be construed in  accordance with the laws of the State of Minnesota. This Plan is hereby adopted by Graco pursuant to the authority granted at a meeting of its Board of Directors held on May 9,  1989.                                      GRACO INC.                                    -4-

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