Minnesota
|
|
41-0285640
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
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)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $1.00 per share
|
GGG
|
The New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
|
|
|
Page
|
Part I
|
|
|
Item 1
|
||
Item 1A
|
||
Item 1B
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
|
||
|
|
|
Part II
|
|
|
Item 5
|
||
Item 6
|
||
Item 7
|
||
Item 7A
|
||
Item 8
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 9
|
||
Item 9A
|
||
Item 9B
|
||
|
|
|
Part III
|
|
|
Item 10
|
||
Item 11
|
||
Item 12
|
||
Item 13
|
||
Item 14
|
||
|
|
|
Part IV
|
|
|
Item 15
|
||
|
||
Item 16
|
||
|
ACCESS TO REPORTS
|
Investors may obtain access free of charge to the Graco Inc. Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, other reports and amendments to the reports by visiting the Graco website at www.graco.com. These reports will be available as soon as reasonably practicable following electronic filing with, or furnishing to, the Securities and Exchange Commission.
|
Facility
|
Owned or
Leased
|
Square
Footage
|
Facility Activities
|
Operating Segment
|
North America
|
||||
Indianapolis, Indiana, United States
|
Owned
|
64,000
|
Warehouse, office, product development and application laboratory
|
Industrial
|
Dexter, Michigan, United States
|
Owned
|
65,000
|
Manufacturing, warehouse, office and product development
|
Process
|
Minneapolis, Minnesota, United States
|
Owned
|
141,000
|
Worldwide headquarters; office and product development
|
Corporate, Industrial and Process
|
Minneapolis, Minnesota, United States
|
Owned
|
42,000
|
Corporate office
|
All segments
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
Dow Jones U.S. Industrial Machinery
|
100
|
|
88
|
|
119
|
|
158
|
|
135
|
|
185
|
S&P 500
|
100
|
|
101
|
|
114
|
|
138
|
|
132
|
|
174
|
Graco Inc.
|
100
|
|
92
|
|
106
|
|
175
|
|
161
|
|
207
|
Period
|
|
Total
Number of Shares Purchased |
|
Average Price
Paid per Share |
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number
of Shares that May Yet Be Purchased Under the Plans or Programs (at end of period) |
|||||
September 28, 2019 - October 25, 2019
|
|
94,597
|
|
|
$
|
44.44
|
|
|
94,597
|
|
|
20,847,631
|
|
October 26, 2019 - November 22, 2019
|
|
3,500
|
|
|
$
|
45.02
|
|
|
3,500
|
|
|
20,844,131
|
|
November 23, 2019 - December 27, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
20,844,131
|
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Net sales
|
$
|
1,646.0
|
|
|
$
|
1,653.3
|
|
|
$
|
1,474.7
|
|
|
$
|
1,329.3
|
|
|
$
|
1,286.5
|
|
Net earnings
|
343.9
|
|
|
341.1
|
|
|
252.4
|
|
|
40.7
|
|
|
345.7
|
|
|||||
Per common share(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net earnings
|
$
|
2.06
|
|
|
$
|
2.04
|
|
|
$
|
1.50
|
|
|
$
|
0.24
|
|
|
$
|
2.00
|
|
Diluted net earnings
|
2.00
|
|
|
1.97
|
|
|
1.45
|
|
|
0.24
|
|
|
1.95
|
|
|||||
Cash dividends declared
|
0.66
|
|
|
0.56
|
|
|
0.49
|
|
|
0.45
|
|
|
0.41
|
|
|||||
Total assets
|
$
|
1,692.2
|
|
|
$
|
1,472.7
|
|
|
$
|
1,390.6
|
|
|
$
|
1,243.1
|
|
|
$
|
1,391.4
|
|
Long-term debt (including current portion)
|
164.3
|
|
|
266.4
|
|
|
226.0
|
|
|
305.7
|
|
|
392.7
|
|
•
|
•
|
•
|
•
|
•
|
•
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales
|
$
|
1,646.0
|
|
|
$
|
1,653.3
|
|
|
$
|
1,474.7
|
|
Operating Earnings
|
424.5
|
|
|
436.4
|
|
|
378.7
|
|
|||
Net Earnings
|
343.9
|
|
|
341.1
|
|
|
252.4
|
|
|||
Diluted Net Earnings per Common Share
|
$
|
2.00
|
|
|
$
|
1.97
|
|
|
$
|
1.45
|
|
Adjusted (non-GAAP)(1):
|
|
|
|
|
|
||||||
Net Earnings, adjusted
|
325.4
|
|
|
326.1
|
|
|
249.4
|
|
|||
Diluted Net Earnings per Common Share, adjusted
|
$
|
1.90
|
|
|
$
|
1.88
|
|
|
$
|
1.43
|
|
(1)
|
Excludes impacts of excess tax benefits from stock option exercises, non-recurring income tax adjustments and pension restructuring. See adjusted financial results below for a reconciliation of the adjusted non-GAAP financial measures to GAAP.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Earnings before income taxes, as reported
|
$
|
405.9
|
|
|
$
|
410.8
|
|
|
$
|
347.1
|
|
Pension settlement loss
|
—
|
|
|
—
|
|
|
12.1
|
|
|||
Earnings before income taxes, adjusted
|
$
|
405.9
|
|
|
$
|
410.8
|
|
|
$
|
359.2
|
|
|
|
|
|
|
|
||||||
Income taxes, as reported
|
$
|
62.0
|
|
|
$
|
69.7
|
|
|
$
|
94.7
|
|
Excess tax benefit from option exercises
|
10.4
|
|
|
10.0
|
|
|
36.3
|
|
|||
Income tax reform
|
—
|
|
|
—
|
|
|
(35.6
|
)
|
|||
Other non-recurring tax changes
|
8.1
|
|
|
5.0
|
|
|
10.0
|
|
|||
Tax effects of adjustments
|
—
|
|
|
—
|
|
|
4.4
|
|
|||
Income taxes, adjusted
|
$
|
80.5
|
|
|
$
|
84.7
|
|
|
$
|
109.8
|
|
|
|
|
|
|
|
||||||
Effective income tax rate
|
|
|
|
|
|
||||||
As reported
|
15.3
|
%
|
|
17.0
|
%
|
|
27.3
|
%
|
|||
Adjusted
|
19.8
|
%
|
|
20.6
|
%
|
|
30.6
|
%
|
|||
|
|
|
|
|
|
||||||
Net Earnings, as reported
|
$
|
343.9
|
|
|
$
|
341.1
|
|
|
$
|
252.4
|
|
Pension settlement loss, net
|
—
|
|
|
—
|
|
|
7.7
|
|
|||
Excess tax benefit from option exercises
|
(10.4
|
)
|
|
(10.0
|
)
|
|
(36.3
|
)
|
|||
Income tax reform
|
—
|
|
|
—
|
|
|
35.6
|
|
|||
Other non-recurring tax changes
|
(8.1
|
)
|
|
(5.0
|
)
|
|
(10.0
|
)
|
|||
Net Earnings, adjusted
|
$
|
325.4
|
|
|
$
|
326.1
|
|
|
$
|
249.4
|
|
|
|
|
|
|
|
||||||
Weighted Average Diluted Shares
|
171.6
|
|
|
173.2
|
|
|
174.3
|
|
|||
Diluted Net Earnings per Share
|
|
|
|
|
|
||||||
As reported
|
$
|
2.00
|
|
|
$
|
1.97
|
|
|
$
|
1.45
|
|
Adjusted
|
$
|
1.90
|
|
|
$
|
1.88
|
|
|
$
|
1.43
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Net Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of products sold
|
47.8
|
|
|
46.6
|
|
|
46.1
|
|
Gross profit
|
52.2
|
|
|
53.4
|
|
|
53.9
|
|
Product development
|
4.1
|
|
|
3.8
|
|
|
4.0
|
|
Selling, marketing and distribution
|
14.2
|
|
|
14.9
|
|
|
15.7
|
|
General and administrative
|
8.1
|
|
|
8.3
|
|
|
8.5
|
|
Operating earnings
|
25.8
|
|
|
26.4
|
|
|
25.7
|
|
Interest expense
|
0.8
|
|
|
0.9
|
|
|
1.1
|
|
Other expense, net
|
0.3
|
|
|
0.7
|
|
|
1.1
|
|
Earnings before income taxes
|
24.7
|
|
|
24.8
|
|
|
23.5
|
|
Income taxes
|
3.8
|
|
|
4.2
|
|
|
6.4
|
|
Net Earnings
|
20.9
|
%
|
|
20.6
|
%
|
|
17.1
|
%
|
Net Earnings, adjusted (see non-GAAP measurements above)
|
19.8
|
%
|
|
19.7
|
%
|
|
16.9
|
%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Americas(1)
|
$
|
960.8
|
|
|
$
|
926.4
|
|
|
$
|
850.5
|
|
EMEA(2)
|
406.5
|
|
|
393.1
|
|
|
343.3
|
|
|||
Asia Pacific
|
278.7
|
|
|
333.8
|
|
|
280.9
|
|
|||
Consolidated
|
$
|
1,646.0
|
|
|
$
|
1,653.3
|
|
|
$
|
1,474.7
|
|
(1)
|
North, South and Central America, including the U.S. Sales in the U.S. were $841 million in 2019, $806 million in 2018 and $743 million in 2017.
|
(2)
|
Europe, Middle East and Africa
|
|
2019
|
|
2018
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
4%
|
|
0%
|
|
0%
|
|
4%
|
|
8%
|
|
1%
|
|
0%
|
|
9%
|
EMEA
|
7%
|
|
1%
|
|
(5)%
|
|
3%
|
|
4%
|
|
7%
|
|
4%
|
|
15%
|
Asia Pacific
|
(15)%
|
|
1%
|
|
(3)%
|
|
(17)%
|
|
13%
|
|
4%
|
|
2%
|
|
19%
|
Consolidated
|
1%
|
|
0%
|
|
(1)%
|
|
0%
|
|
8%
|
|
3%
|
|
1%
|
|
12%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
|
|
|
|
||||||
Industrial
|
$
|
747.4
|
|
|
$
|
781.0
|
|
|
$
|
692.0
|
|
Process
|
344.9
|
|
|
338.0
|
|
|
294.6
|
|
|||
Contractor
|
553.7
|
|
|
534.3
|
|
|
488.1
|
|
|||
Total
|
$
|
1,646.0
|
|
|
$
|
1,653.3
|
|
|
$
|
1,474.7
|
|
Operating Earnings
|
|
|
|
|
|
||||||
Industrial
|
$
|
247.2
|
|
|
$
|
271.3
|
|
|
$
|
237.7
|
|
Process
|
76.4
|
|
|
68.5
|
|
|
52.2
|
|
|||
Contractor
|
128.3
|
|
|
120.9
|
|
|
113.9
|
|
|||
Unallocated corporate (expense) (1)
|
(27.4
|
)
|
|
(24.3
|
)
|
|
(25.1
|
)
|
|||
Total
|
$
|
424.5
|
|
|
$
|
436.4
|
|
|
$
|
378.7
|
|
(1)
|
Unallocated corporate (expense) includes such items as stock compensation, certain acquisition transaction items, bad debt expense, charitable contributions, and certain facility expenses.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
|
|
|
|
||||||
Americas
|
$
|
324.3
|
|
|
$
|
314.9
|
|
|
$
|
299.5
|
|
EMEA
|
240.1
|
|
|
234.3
|
|
|
199.2
|
|
|||
Asia Pacific
|
183.0
|
|
|
231.8
|
|
|
193.3
|
|
|||
Total
|
$
|
747.4
|
|
|
$
|
781.0
|
|
|
$
|
692.0
|
|
Operating Earnings as a Percentage of Sales
|
33
|
%
|
|
35
|
%
|
|
34
|
%
|
|
2019
|
|
2018
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
3%
|
|
0%
|
|
0%
|
|
3%
|
|
5%
|
|
0%
|
|
0%
|
|
5%
|
EMEA
|
7%
|
|
0%
|
|
(5)%
|
|
2%
|
|
3%
|
|
11%
|
|
4%
|
|
18%
|
Asia Pacific
|
(19)%
|
|
0%
|
|
(2)%
|
|
(21)%
|
|
12%
|
|
6%
|
|
2%
|
|
20%
|
Segment Total
|
(2)%
|
|
0%
|
|
(2)%
|
|
(4)%
|
|
6%
|
|
5%
|
|
2%
|
|
13%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
|
|
|
|
||||||
Americas
|
$
|
222.2
|
|
|
$
|
215.9
|
|
|
$
|
187.6
|
|
EMEA
|
61.5
|
|
|
58.5
|
|
|
56.0
|
|
|||
Asia Pacific
|
61.2
|
|
|
63.6
|
|
|
51.0
|
|
|||
Total
|
$
|
344.9
|
|
|
$
|
338.0
|
|
|
$
|
294.6
|
|
Operating Earnings as a Percentage of Sales
|
22
|
%
|
|
20
|
%
|
|
18
|
%
|
|
2019
|
|
2018
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
3%
|
|
0%
|
|
0%
|
|
3%
|
|
14%
|
|
1%
|
|
0%
|
|
15%
|
EMEA
|
3%
|
|
5%
|
|
(3)%
|
|
5%
|
|
1%
|
|
0%
|
|
3%
|
|
4%
|
Asia Pacific
|
(5)%
|
|
4%
|
|
(3)%
|
|
(4)%
|
|
23%
|
|
1%
|
|
1%
|
|
25%
|
Segment Total
|
1%
|
|
2%
|
|
(1)%
|
|
2%
|
|
13%
|
|
1%
|
|
1%
|
|
15%
|
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
|
|
|
|
|
||||||
Americas
|
$
|
414.3
|
|
|
$
|
395.6
|
|
|
$
|
363.4
|
|
EMEA
|
104.9
|
|
|
100.4
|
|
|
88.1
|
|
|||
Asia Pacific
|
34.5
|
|
|
38.3
|
|
|
36.6
|
|
|||
Total
|
$
|
553.7
|
|
|
$
|
534.3
|
|
|
$
|
488.1
|
|
Operating Earnings as a Percentage of Sales
|
23
|
%
|
|
23
|
%
|
|
23
|
%
|
|
2019
|
|
2018
|
||||||||||||
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
|
Volume and Price
|
|
Acquisitions
|
|
Currency
|
|
Total
|
Americas
|
5%
|
|
0%
|
|
0%
|
|
5%
|
|
8%
|
|
1%
|
|
0%
|
|
9%
|
EMEA
|
9%
|
|
0%
|
|
(5)%
|
|
4%
|
|
10%
|
|
0%
|
|
4%
|
|
14%
|
Asia Pacific
|
(6)%
|
|
0%
|
|
(4)%
|
|
(10)%
|
|
4%
|
|
0%
|
|
1%
|
|
5%
|
Segment Total
|
5%
|
|
0%
|
|
(1)%
|
|
4%
|
|
8%
|
|
1%
|
|
0%
|
|
9%
|
|
2019
|
|
2018
|
||||
Working capital
|
$
|
506.1
|
|
|
$
|
423.4
|
|
Current ratio
|
2.8
|
|
|
2.4
|
|
||
Days of sales in receivables outstanding
|
59
|
|
|
60
|
|
||
Inventory turnover (LIFO)
|
2.7
|
|
|
2.9
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
$
|
418.7
|
|
|
$
|
368.0
|
|
|
$
|
337.9
|
|
Investing activities
|
(155.5
|
)
|
|
(66.3
|
)
|
|
(68.5
|
)
|
|||
Financing activities
|
(174.0
|
)
|
|
(282.7
|
)
|
|
(217.1
|
)
|
|||
Effect of exchange rates on cash
|
(0.3
|
)
|
|
0.2
|
|
|
(1.0
|
)
|
|||
Net cash provided
|
88.9
|
|
|
19.2
|
|
|
51.3
|
|
|||
Cash and cash equivalents at end of year
|
$
|
221.0
|
|
|
$
|
132.1
|
|
|
$
|
112.9
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
||||||||||
Long-term debt
|
$
|
164.3
|
|
|
$
|
—
|
|
|
$
|
14.3
|
|
|
$
|
75.0
|
|
|
$
|
75.0
|
|
Interest on long-term debt
|
39.9
|
|
|
8.4
|
|
|
15.5
|
|
|
9.0
|
|
|
7.0
|
|
|||||
Operating leases
|
35.7
|
|
|
8.2
|
|
|
13.9
|
|
|
6.1
|
|
|
7.5
|
|
|||||
Service contracts
|
20.7
|
|
|
10.5
|
|
|
9.4
|
|
|
0.5
|
|
|
0.3
|
|
|||||
Purchase obligations (1)
|
127.0
|
|
|
127.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unfunded pension and postretirement medical benefits (2)
|
40.0
|
|
|
3.5
|
|
|
7.1
|
|
|
7.7
|
|
|
21.7
|
|
|||||
Total
|
$
|
427.6
|
|
|
$
|
157.6
|
|
|
$
|
60.2
|
|
|
$
|
98.3
|
|
|
$
|
111.5
|
|
(1)
|
The Company is committed to pay suppliers under the terms of open purchase orders issued in the normal course of business. The Company also has commitments with certain suppliers to purchase minimum quantities, and under the terms of certain agreements, the Company is committed for certain portions of the supplier’s inventory. The Company does not purchase, or commit to purchase, quantities in excess of normal usage or amounts that cannot be used within one year.
|
(2)
|
The amounts and timing of future Company contributions to the funded qualified defined benefit pension plans are unknown because they are dependent on pension fund asset performance and pension obligation valuation assumptions.
|
Assumption
|
|
|
|
|
Funded Status
|
|
Expense
|
||||
Discount rate
|
|
|
|
|
$
|
34.3
|
|
|
$
|
2.7
|
|
Expected return on assets
|
|
|
|
|
—
|
|
|
1.3
|
|
•
|
We tested the effectiveness of internal controls over the valuation of the pension obligation, including management’s controls over selection of the discount rates.
|
•
|
With the assistance of our actuarial specialists, we evaluated the reasonableness of the discount rates by:
|
•
|
Evaluating the methodology utilized to select the discount rates for conformity with applicable accounting guidance.
|
•
|
Testing the source information underlying the determination of the discount rates, including the methodology used to construct the yield curve, the characteristics of the bonds underlying the yield curve analysis, and the mathematical accuracy of the calculation.
|
•
|
Developing independent estimates using external published yield curves and comparing them to the discount rates selected by management.
|
|
Years Ended
|
||||||||||
|
December 27,
2019 |
|
December 28,
2018 |
|
December 29,
2017 |
||||||
Net Sales
|
$
|
1,646,045
|
|
|
$
|
1,653,292
|
|
|
$
|
1,474,744
|
|
Cost of products sold
|
786,289
|
|
|
770,753
|
|
|
679,542
|
|
|||
Gross Profit
|
859,756
|
|
|
882,539
|
|
|
795,202
|
|
|||
Product development
|
67,557
|
|
|
63,124
|
|
|
59,217
|
|
|||
Selling, marketing and distribution
|
234,325
|
|
|
245,473
|
|
|
231,364
|
|
|||
General and administrative
|
133,418
|
|
|
137,515
|
|
|
125,876
|
|
|||
Operating Earnings
|
424,456
|
|
|
436,427
|
|
|
378,745
|
|
|||
Interest expense
|
13,110
|
|
|
14,385
|
|
|
16,202
|
|
|||
Other expense, net
|
5,469
|
|
|
11,276
|
|
|
15,449
|
|
|||
Earnings Before Income Taxes
|
405,877
|
|
|
410,766
|
|
|
347,094
|
|
|||
Income taxes
|
62,024
|
|
|
69,712
|
|
|
94,682
|
|
|||
Net Earnings
|
$
|
343,853
|
|
|
$
|
341,054
|
|
|
$
|
252,412
|
|
Basic Net Earnings per Common Share
|
$
|
2.06
|
|
|
$
|
2.04
|
|
|
$
|
1.50
|
|
Diluted Net Earnings per Common Share
|
$
|
2.00
|
|
|
$
|
1.97
|
|
|
$
|
1.45
|
|
|
Years Ended
|
||||||||||
|
December 27,
2019 |
|
December 28,
2018 |
|
December 29,
2017 |
||||||
Net Earnings
|
$
|
343,853
|
|
|
$
|
341,054
|
|
|
$
|
252,412
|
|
Components of other comprehensive income (loss)
|
|
|
|
|
|
||||||
Cumulative translation adjustment
|
1,902
|
|
|
(8,609
|
)
|
|
16,443
|
|
|||
Pension and postretirement medical liability adjustment
|
(33,772
|
)
|
|
8,793
|
|
|
(3,321
|
)
|
|||
Income taxes - pension and postretirement medical liability
|
6,940
|
|
|
(1,799
|
)
|
|
1,317
|
|
|||
Other comprehensive income (loss)
|
(24,930
|
)
|
|
(1,615
|
)
|
|
14,439
|
|
|||
Comprehensive Income
|
$
|
318,923
|
|
|
$
|
339,439
|
|
|
$
|
266,851
|
|
|
December 27,
2019 |
|
December 28,
2018 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
220,973
|
|
|
$
|
132,118
|
|
Accounts receivable, less allowances of $5,300 and $5,300
|
267,345
|
|
|
274,608
|
|
||
Inventories
|
273,233
|
|
|
283,982
|
|
||
Other current assets
|
29,917
|
|
|
32,508
|
|
||
Total current assets
|
791,468
|
|
|
723,216
|
|
||
Property, Plant and Equipment, net
|
325,546
|
|
|
229,295
|
|
||
Goodwill
|
307,663
|
|
|
293,846
|
|
||
Other Intangible Assets, net
|
162,623
|
|
|
166,310
|
|
||
Operating Lease Assets
|
29,891
|
|
|
—
|
|
||
Deferred Income Taxes
|
39,327
|
|
|
32,055
|
|
||
Other Assets
|
35,692
|
|
|
28,019
|
|
||
Total Assets
|
$
|
1,692,210
|
|
|
$
|
1,472,741
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Notes payable to banks
|
$
|
7,732
|
|
|
$
|
11,083
|
|
Trade accounts payable
|
54,117
|
|
|
56,902
|
|
||
Salaries and incentives
|
51,301
|
|
|
62,297
|
|
||
Dividends payable
|
29,235
|
|
|
26,480
|
|
||
Other current liabilities
|
142,937
|
|
|
143,041
|
|
||
Total current liabilities
|
285,322
|
|
|
299,803
|
|
||
Long-term Debt
|
164,298
|
|
|
266,391
|
|
||
Retirement Benefits and Deferred Compensation
|
182,707
|
|
|
133,388
|
|
||
Operating Lease Liabilities
|
24,176
|
|
|
—
|
|
||
Deferred Income Taxes
|
10,776
|
|
|
16,586
|
|
||
Other Non-current Liabilities
|
—
|
|
|
4,700
|
|
||
Commitments and Contingencies (Note K)
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
||||
Common stock, $1 par value; 291,000,000 shares authorized;
167,286,836 and 165,170,888 shares outstanding in 2019 and 2018 |
167,287
|
|
|
165,171
|
|
||
Additional paid-in-capital
|
578,440
|
|
|
510,825
|
|
||
Retained earnings
|
448,991
|
|
|
220,734
|
|
||
Accumulated other comprehensive income (loss)
|
(169,787
|
)
|
|
(144,857
|
)
|
||
Total shareholders’ equity
|
1,024,931
|
|
|
751,873
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
1,692,210
|
|
|
$
|
1,472,741
|
|
|
Years Ended
|
||||||||||
|
December 27,
2019 |
|
December 28,
2018 |
|
December 29,
2017 |
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
||||||
Net Earnings
|
$
|
343,853
|
|
|
$
|
341,054
|
|
|
$
|
252,412
|
|
Adjustments to reconcile net earnings to net cash
provided by operating activities |
|
|
|
|
|
||||||
Depreciation and amortization
|
48,911
|
|
|
47,754
|
|
|
45,583
|
|
|||
Deferred income taxes
|
(6,411
|
)
|
|
15,405
|
|
|
34,446
|
|
|||
Share-based compensation
|
26,669
|
|
|
25,565
|
|
|
23,652
|
|
|||
Change in
|
|
|
|
|
|
||||||
Accounts receivable
|
8,934
|
|
|
(12,402
|
)
|
|
(37,669
|
)
|
|||
Inventories
|
12,435
|
|
|
(30,719
|
)
|
|
(32,011
|
)
|
|||
Trade accounts payable
|
(539
|
)
|
|
(1,976
|
)
|
|
4,588
|
|
|||
Salaries and incentives
|
(14,069
|
)
|
|
2,336
|
|
|
11,431
|
|
|||
Retirement benefits and deferred compensation
|
13,264
|
|
|
(27,237
|
)
|
|
6,920
|
|
|||
Other accrued liabilities
|
(11,510
|
)
|
|
7,517
|
|
|
35,321
|
|
|||
Other
|
(2,803
|
)
|
|
688
|
|
|
(6,809
|
)
|
|||
Net cash provided by operating activities
|
418,734
|
|
|
367,985
|
|
|
337,864
|
|
|||
Cash Flows From Investing Activities
|
|
|
|
|
|
||||||
Property, plant and equipment additions
|
(127,953
|
)
|
|
(53,854
|
)
|
|
(40,194
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(26,577
|
)
|
|
(10,769
|
)
|
|
(27,905
|
)
|
|||
Other
|
(939
|
)
|
|
(1,624
|
)
|
|
(348
|
)
|
|||
Net cash provided by (used in) investing activities
|
(155,469
|
)
|
|
(66,247
|
)
|
|
(68,447
|
)
|
|||
Cash Flows From Financing Activities
|
|
|
|
|
|
||||||
Borrowings (payments) on short-term lines of credit, net
|
(3,341
|
)
|
|
4,931
|
|
|
(3,026
|
)
|
|||
Borrowings on long-term lines of credit
|
105,423
|
|
|
620,746
|
|
|
315,920
|
|
|||
Payments on long-term debt and lines of credit
|
(207,191
|
)
|
|
(583,212
|
)
|
|
(395,570
|
)
|
|||
Common stock issued
|
48,250
|
|
|
24,634
|
|
|
60,685
|
|
|||
Common stock repurchased
|
(9,482
|
)
|
|
(244,814
|
)
|
|
(90,160
|
)
|
|||
Taxes paid related to net share settlement of equity awards
|
(1,268
|
)
|
|
(16,151
|
)
|
|
(24,448
|
)
|
|||
Cash dividends paid
|
(106,443
|
)
|
|
(88,845
|
)
|
|
(80,477
|
)
|
|||
Net cash provided by (used in) financing activities
|
(174,052
|
)
|
|
(282,711
|
)
|
|
(217,076
|
)
|
|||
Effect of exchange rate changes on cash
|
(358
|
)
|
|
187
|
|
|
(1,032
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
88,855
|
|
|
19,214
|
|
|
51,309
|
|
|||
Cash, Cash Equivalents and Restricted Cash
|
|
|
|
|
|
||||||
Beginning of year
|
132,118
|
|
|
112,904
|
|
|
61,595
|
|
|||
End of year
|
$
|
220,973
|
|
|
$
|
132,118
|
|
|
$
|
112,904
|
|
Reconciliation to Consolidated Balance Sheets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
220,973
|
|
|
$
|
132,118
|
|
|
$
|
103,662
|
|
Restricted cash included in other current assets
|
—
|
|
|
—
|
|
|
9,242
|
|
|||
Cash, cash equivalents and restricted cash
|
$
|
220,973
|
|
|
$
|
132,118
|
|
|
$
|
112,904
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other Comprehensive
Income (Loss)
|
|
Total
|
||||||||||
Balance December 30, 2016
|
$
|
55,834
|
|
|
$
|
453,394
|
|
|
$
|
206,820
|
|
|
$
|
(142,228
|
)
|
|
$
|
573,820
|
|
Stock split
|
112,879
|
|
|
—
|
|
|
(112,879
|
)
|
|
—
|
|
|
—
|
|
|||||
Shares issued
|
1,489
|
|
|
35,164
|
|
|
—
|
|
|
—
|
|
|
36,653
|
|
|||||
Shares repurchased
|
(883
|
)
|
|
(7,172
|
)
|
|
(82,105
|
)
|
|
—
|
|
|
(90,160
|
)
|
|||||
Stock compensation cost
|
—
|
|
|
18,963
|
|
|
—
|
|
|
—
|
|
|
18,963
|
|
|||||
Restricted stock canceled (issued)
|
—
|
|
|
(415
|
)
|
|
—
|
|
|
—
|
|
|
(415
|
)
|
|||||
Net earnings
|
—
|
|
|
—
|
|
|
252,412
|
|
|
—
|
|
|
252,412
|
|
|||||
Dividends declared ($0.4925 per share)
|
—
|
|
|
—
|
|
|
(82,649
|
)
|
|
—
|
|
|
(82,649
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
14,439
|
|
|
14,439
|
|
|||||
Balance December 29, 2017
|
169,319
|
|
|
499,934
|
|
|
181,599
|
|
|
(127,789
|
)
|
|
723,063
|
|
|||||
Shares issued
|
1,657
|
|
|
7,598
|
|
|
—
|
|
|
—
|
|
|
9,255
|
|
|||||
Shares repurchased
|
(5,805
|
)
|
|
(17,140
|
)
|
|
(224,307
|
)
|
|
—
|
|
|
(247,252
|
)
|
|||||
Stock compensation cost
|
—
|
|
|
21,205
|
|
|
—
|
|
|
—
|
|
|
21,205
|
|
|||||
Restricted stock canceled (issued)
|
—
|
|
|
(772
|
)
|
|
—
|
|
|
—
|
|
|
(772
|
)
|
|||||
Net earnings
|
—
|
|
|
—
|
|
|
341,054
|
|
|
—
|
|
|
341,054
|
|
|||||
Dividends declared ($0.5575 per share)
|
—
|
|
|
—
|
|
|
(93,065
|
)
|
|
—
|
|
|
(93,065
|
)
|
|||||
Reclassified to retained earnings from AOCI
|
—
|
|
|
—
|
|
|
15,453
|
|
|
(15,453
|
)
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,615
|
)
|
|
(1,615
|
)
|
|||||
Balance December 28, 2018
|
165,171
|
|
|
510,825
|
|
|
220,734
|
|
|
(144,857
|
)
|
|
751,873
|
|
|||||
Shares issued
|
2,274
|
|
|
44,707
|
|
|
—
|
|
|
—
|
|
|
46,981
|
|
|||||
Shares repurchased
|
(158
|
)
|
|
(490
|
)
|
|
(6,397
|
)
|
|
—
|
|
|
(7,045
|
)
|
|||||
Stock compensation cost
|
—
|
|
|
23,398
|
|
|
—
|
|
|
—
|
|
|
23,398
|
|
|||||
Net earnings
|
—
|
|
|
—
|
|
|
343,853
|
|
|
—
|
|
|
343,853
|
|
|||||
Dividends declared ($0.6550 per share)
|
—
|
|
|
—
|
|
|
(109,199
|
)
|
|
—
|
|
|
(109,199
|
)
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,930
|
)
|
|
(24,930
|
)
|
|||||
Balance December 27, 2019
|
$
|
167,287
|
|
|
$
|
578,440
|
|
|
$
|
448,991
|
|
|
$
|
(169,787
|
)
|
|
$
|
1,024,931
|
|
|
Level
|
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
|
||||
Cash surrender value of life insurance
|
2
|
|
$
|
17,702
|
|
|
$
|
14,320
|
|
Forward exchange contracts
|
2
|
|
—
|
|
|
82
|
|
||
Total assets at fair value
|
|
|
$
|
17,702
|
|
|
$
|
14,402
|
|
Liabilities
|
|
|
|
|
|
||||
Contingent consideration
|
3
|
|
$
|
9,072
|
|
|
$
|
7,200
|
|
Deferred compensation
|
2
|
|
4,719
|
|
|
4,203
|
|
||
Forward exchange contracts
|
2
|
|
87
|
|
|
—
|
|
||
Total liabilities at fair value
|
|
|
$
|
13,878
|
|
|
$
|
11,403
|
|
|
2019
|
|
2018
|
||||
Prepaid income taxes
|
$
|
13,462
|
|
|
$
|
14,762
|
|
Prepaid expenses and other
|
16,455
|
|
|
17,746
|
|
||
Total
|
$
|
29,917
|
|
|
$
|
32,508
|
|
Buildings and improvements
|
|
10 to 30 years
|
Leasehold improvements
|
|
lesser of 5 to 10 years or life of lease
|
Manufacturing equipment
|
|
lesser of 5 to 10 years or life of equipment
|
Office, warehouse and automotive equipment
|
|
3 to 10 years
|
|
Industrial
|
|
Process
|
|
Contractor
|
|
Total
|
||||||||
Balance, December 29, 2017
|
$
|
161,673
|
|
|
$
|
97,971
|
|
|
$
|
19,145
|
|
|
$
|
278,789
|
|
Additions, adjustments from business acquisitions
|
17,544
|
|
|
170
|
|
|
409
|
|
|
18,123
|
|
||||
Foreign currency translation
|
(2,093
|
)
|
|
(973
|
)
|
|
—
|
|
|
(3,066
|
)
|
||||
Balance, December 28, 2018
|
177,124
|
|
|
97,168
|
|
|
19,554
|
|
|
293,846
|
|
||||
Additions, adjustments from business acquisitions
|
—
|
|
|
13,444
|
|
|
—
|
|
|
13,444
|
|
||||
Foreign currency translation
|
(12
|
)
|
|
385
|
|
|
—
|
|
|
373
|
|
||||
Balance, December 27, 2019
|
$
|
177,112
|
|
|
$
|
110,997
|
|
|
$
|
19,554
|
|
|
$
|
307,663
|
|
|
Finite Life
|
|
Indefinite Life
|
|
|
||||||||||||||
|
Customer
Relationships |
|
Patents and
Proprietary Technology |
|
Trademarks,
Trade Names and Other |
|
Trade
Names |
|
Total
|
||||||||||
As of December 27, 2019
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
$
|
186,310
|
|
|
$
|
20,413
|
|
|
$
|
1,020
|
|
|
$
|
61,920
|
|
|
$
|
269,663
|
|
Accumulated amortization
|
(80,764
|
)
|
|
(10,526
|
)
|
|
(650
|
)
|
|
—
|
|
|
(91,940
|
)
|
|||||
Foreign currency translation
|
(10,412
|
)
|
|
(885
|
)
|
|
(73
|
)
|
|
(3,730
|
)
|
|
(15,100
|
)
|
|||||
Book value
|
$
|
95,134
|
|
|
$
|
9,002
|
|
|
$
|
297
|
|
|
$
|
58,190
|
|
|
$
|
162,623
|
|
Weighted average life in years
|
13
|
|
|
10
|
|
|
4
|
|
|
N/A
|
|
|
|
As of December 28, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
$
|
179,449
|
|
|
$
|
18,571
|
|
|
$
|
1,020
|
|
|
$
|
59,537
|
|
|
$
|
258,577
|
|
Accumulated amortization
|
(67,322
|
)
|
|
(8,647
|
)
|
|
(439
|
)
|
|
—
|
|
|
(76,408
|
)
|
|||||
Foreign currency translation
|
(10,817
|
)
|
|
(895
|
)
|
|
(73
|
)
|
|
(4,074
|
)
|
|
(15,859
|
)
|
|||||
Book value
|
$
|
101,310
|
|
|
$
|
9,029
|
|
|
$
|
508
|
|
|
$
|
55,463
|
|
|
$
|
166,310
|
|
Weighted average life in years
|
13
|
|
|
10
|
|
|
4
|
|
|
N/A
|
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Estimated Amortization Expense
|
$
|
16,095
|
|
|
$
|
15,806
|
|
|
$
|
15,716
|
|
|
$
|
14,811
|
|
|
$
|
13,249
|
|
|
$
|
28,756
|
|
|
2019
|
|
2018
|
||||
Cash surrender value of life insurance
|
$
|
17,702
|
|
|
$
|
14,320
|
|
Capitalized software
|
2,985
|
|
|
2,742
|
|
||
Equity method investment
|
7,603
|
|
|
7,252
|
|
||
Prepaid pension
|
2,931
|
|
|
—
|
|
||
Deposits and other
|
4,471
|
|
|
3,705
|
|
||
Total
|
$
|
35,692
|
|
|
$
|
28,019
|
|
|
2019
|
|
2018
|
||||
Accrued self-insurance retentions
|
$
|
7,570
|
|
|
$
|
7,870
|
|
Accrued warranty and service liabilities
|
12,785
|
|
|
11,056
|
|
||
Accrued trade promotions
|
8,390
|
|
|
11,449
|
|
||
Payable for employee stock purchases
|
13,722
|
|
|
11,916
|
|
||
Customer advances and deferred revenue
|
33,138
|
|
|
39,995
|
|
||
Income taxes payable
|
8,706
|
|
|
8,515
|
|
||
Operating lease liabilities, current
|
7,690
|
|
|
—
|
|
||
Right of return refund liability
|
13,791
|
|
|
12,705
|
|
||
Other
|
37,145
|
|
|
39,535
|
|
||
Total
|
$
|
142,937
|
|
|
$
|
143,041
|
|
|
2019
|
|
2018
|
||||
Balance, beginning of year
|
$
|
11,056
|
|
|
$
|
10,535
|
|
Charged to expense
|
10,350
|
|
|
8,963
|
|
||
Margin on parts sales reversed
|
2,576
|
|
|
1,193
|
|
||
Reductions for claims settled
|
(11,197
|
)
|
|
(9,635
|
)
|
||
Balance, end of year
|
$
|
12,785
|
|
|
$
|
11,056
|
|
|
2019
|
|
2018
|
||||
Foreign Currency Contracts
|
|
|
|
||||
Assets
|
$
|
—
|
|
|
$
|
322
|
|
Liabilities
|
(87
|
)
|
|
(240
|
)
|
||
Net Assets (Liabilities)
|
$
|
(87
|
)
|
|
$
|
82
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales
|
|
|
|
|
|
||||||
Industrial
|
$
|
747,396
|
|
|
$
|
781,029
|
|
|
$
|
691,978
|
|
Process
|
344,930
|
|
|
337,953
|
|
|
294,652
|
|
|||
Contractor
|
553,719
|
|
|
534,310
|
|
|
488,114
|
|
|||
Total
|
$
|
1,646,045
|
|
|
$
|
1,653,292
|
|
|
$
|
1,474,744
|
|
Operating Earnings
|
|
|
|
|
|
||||||
Industrial
|
$
|
247,216
|
|
|
$
|
271,307
|
|
|
$
|
237,700
|
|
Process
|
76,367
|
|
|
68,514
|
|
|
52,216
|
|
|||
Contractor
|
128,282
|
|
|
120,905
|
|
|
113,898
|
|
|||
Unallocated corporate (expense)
|
(27,409
|
)
|
|
(24,299
|
)
|
|
(25,069
|
)
|
|||
Total
|
$
|
424,456
|
|
|
$
|
436,427
|
|
|
$
|
378,745
|
|
Assets
|
|
|
|
|
|
||||||
Industrial
|
$
|
615,486
|
|
|
$
|
640,683
|
|
|
|
||
Process
|
387,216
|
|
|
350,306
|
|
|
|
||||
Contractor
|
368,832
|
|
|
283,727
|
|
|
|
||||
Unallocated corporate
|
320,676
|
|
|
198,025
|
|
|
|
||||
Total
|
$
|
1,692,210
|
|
|
$
|
1,472,741
|
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales (based on customer location)
|
|
|
|
|
|
||||||
United States
|
$
|
840,659
|
|
|
$
|
806,127
|
|
|
$
|
743,344
|
|
Other countries
|
805,386
|
|
|
847,165
|
|
|
731,400
|
|
|||
Total
|
$
|
1,646,045
|
|
|
$
|
1,653,292
|
|
|
$
|
1,474,744
|
|
Long-lived Assets
|
|
|
|
|
|
||||||
United States
|
$
|
268,864
|
|
|
$
|
178,331
|
|
|
|
||
Other countries
|
56,682
|
|
|
50,964
|
|
|
|
||||
Total
|
$
|
325,546
|
|
|
$
|
229,295
|
|
|
|
|
2019
|
|
2018
|
||||
Finished products and components
|
$
|
132,128
|
|
|
$
|
142,535
|
|
Products and components in various stages of completion
|
86,957
|
|
|
83,768
|
|
||
Raw materials and purchased components
|
117,026
|
|
|
115,705
|
|
||
Subtotal
|
336,111
|
|
|
342,008
|
|
||
Reduction to LIFO cost
|
(62,878
|
)
|
|
(58,026
|
)
|
||
Total
|
$
|
273,233
|
|
|
$
|
283,982
|
|
|
2019
|
|
2018
|
||||
Land and improvements
|
$
|
29,817
|
|
|
$
|
26,252
|
|
Buildings and improvements
|
182,195
|
|
|
157,385
|
|
||
Manufacturing equipment
|
320,240
|
|
|
317,011
|
|
||
Office, warehouse and automotive equipment
|
48,476
|
|
|
44,901
|
|
||
Additions in progress
|
99,476
|
|
|
24,484
|
|
||
Total property, plant and equipment
|
680,204
|
|
|
570,033
|
|
||
Accumulated depreciation
|
(354,658
|
)
|
|
(340,738
|
)
|
||
Net property, plant and equipment
|
$
|
325,546
|
|
|
$
|
229,295
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
294,402
|
|
|
$
|
310,999
|
|
|
$
|
269,258
|
|
Foreign
|
111,475
|
|
|
99,767
|
|
|
77,836
|
|
|||
Total
|
$
|
405,877
|
|
|
$
|
410,766
|
|
|
$
|
347,094
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
39,015
|
|
|
$
|
27,760
|
|
|
$
|
41,996
|
|
State and local
|
3,347
|
|
|
3,398
|
|
|
3,088
|
|
|||
Foreign
|
26,270
|
|
|
23,118
|
|
|
19,486
|
|
|||
Current income tax expense
|
68,632
|
|
|
54,276
|
|
|
64,570
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Domestic
|
(151
|
)
|
|
17,058
|
|
|
35,782
|
|
|||
Foreign
|
(6,457
|
)
|
|
(1,622
|
)
|
|
(5,670
|
)
|
|||
Deferred income tax expense (benefit)
|
(6,608
|
)
|
|
15,436
|
|
|
30,112
|
|
|||
Total
|
$
|
62,024
|
|
|
$
|
69,712
|
|
|
$
|
94,682
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Statutory tax rate
|
21
|
%
|
|
21
|
%
|
|
35
|
%
|
Tax effect of international operations
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
State taxes, net of federal effect
|
1
|
|
|
1
|
|
|
1
|
|
U.S. general business tax credits
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Domestic production deduction
|
—
|
|
|
—
|
|
|
(2
|
)
|
Stock compensation excess tax benefit
|
(3
|
)
|
|
(2
|
)
|
|
(10
|
)
|
Impact of 2017 Tax Cuts and Jobs Act
|
—
|
|
|
—
|
|
|
10
|
|
Global Intangible Low-taxed Income (GILTI)
|
1
|
|
|
1
|
|
|
—
|
|
Foreign Derived Intangible Income (FDII)
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
Pension contribution
|
—
|
|
|
(1
|
)
|
|
—
|
|
Effective tax rate
|
15
|
%
|
|
17
|
%
|
|
27
|
%
|
|
2019
|
|
2018
|
||||
Inventory valuations
|
$
|
966
|
|
|
$
|
(1,012
|
)
|
Self-insurance retention accruals
|
1,280
|
|
|
1,284
|
|
||
Warranty reserves
|
2,095
|
|
|
1,778
|
|
||
Vacation accruals
|
2,335
|
|
|
2,259
|
|
||
Bad debt reserves
|
3,142
|
|
|
2,785
|
|
||
Excess of tax over book depreciation and amortization
|
(38,735
|
)
|
|
(37,208
|
)
|
||
Pension liability
|
32,079
|
|
|
22,884
|
|
||
Postretirement medical
|
4,625
|
|
|
4,491
|
|
||
Acquisition costs
|
407
|
|
|
601
|
|
||
Stock compensation
|
13,979
|
|
|
13,763
|
|
||
Deferred compensation
|
1,960
|
|
|
1,994
|
|
||
Net operating loss carryforward
|
929
|
|
|
—
|
|
||
Deferred revenue
|
1,638
|
|
|
590
|
|
||
Other
|
1,851
|
|
|
1,260
|
|
||
Net deferred tax assets
|
$
|
28,551
|
|
|
$
|
15,469
|
|
|
Average Interest Rate
|
|
|
|
|
|
|
||||
|
December 27, 2019
|
|
Maturity
|
|
2019
|
|
2018
|
||||
Private placement unsecured fixed-rate notes
|
|
|
|
|
|
|
|
||||
Series B
|
5.01%
|
|
March 2023
|
|
75,000
|
|
|
75,000
|
|
||
Series C
|
4.88%
|
|
January 2020
|
|
—
|
|
|
75,000
|
|
||
Series D
|
5.35%
|
|
July 2026
|
|
75,000
|
|
|
75,000
|
|
||
Unsecured revolving credit facility
|
N/A
|
|
December 2021
|
|
—
|
|
|
—
|
|
||
Unsecured revolving credit facility - CNH
|
4.41%
|
|
N/A
|
|
14,298
|
|
|
41,391
|
|
||
Notes payable to banks
|
1.11%
|
|
2020
|
|
7,732
|
|
|
11,083
|
|
||
Total debt
|
|
|
|
|
$
|
172,030
|
|
|
$
|
277,474
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Maturities of debt
|
$
|
7,732
|
|
|
$
|
14,298
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
Pension and
Postretirement
Medical
|
|
Cumulative
Translation
Adjustment
|
|
Total
|
||||||
Balance, December 30, 2016
|
$
|
(76,426
|
)
|
|
$
|
(65,802
|
)
|
|
$
|
(142,228
|
)
|
Other comprehensive income (loss) before reclassifications
|
(14,791
|
)
|
|
16,443
|
|
|
1,652
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
12,787
|
|
|
—
|
|
|
12,787
|
|
|||
Balance, December 29, 2017
|
(78,430
|
)
|
|
(49,359
|
)
|
|
(127,789
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
(196
|
)
|
|
(8,609
|
)
|
|
(8,805
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
7,190
|
|
|
—
|
|
|
7,190
|
|
|||
Reclassified to retained earnings
|
(15,453
|
)
|
|
—
|
|
|
(15,453
|
)
|
|||
Balance, December 28, 2018
|
(86,889
|
)
|
|
(57,968
|
)
|
|
(144,857
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
(33,938
|
)
|
|
1,902
|
|
|
(32,036
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
7,106
|
|
|
—
|
|
|
7,106
|
|
|||
Balance, December 27, 2019
|
$
|
(113,721
|
)
|
|
$
|
(56,066
|
)
|
|
$
|
(169,787
|
)
|
|
Option
Shares
|
|
Weighted Average
Exercise Price
|
|
Options
Exercisable
|
|
Weighted Average
Exercise Price
|
||||||
Outstanding, December 30, 2016
|
16,605
|
|
|
$
|
18.42
|
|
|
11,016
|
|
|
$
|
15.13
|
|
Granted
|
1,725
|
|
|
30.71
|
|
|
|
|
|
||||
Exercised
|
(4,903
|
)
|
|
12.86
|
|
|
|
|
|
||||
Canceled
|
(137
|
)
|
|
26.63
|
|
|
|
|
|
||||
Outstanding, December 29, 2017
|
13,290
|
|
|
21.99
|
|
|
7,729
|
|
|
18.33
|
|
||
Granted
|
1,163
|
|
|
44.05
|
|
|
|
|
|
||||
Exercised
|
(2,081
|
)
|
|
18.17
|
|
|
|
|
|
||||
Canceled
|
(102
|
)
|
|
28.59
|
|
|
|
|
|
||||
Outstanding, December 28, 2018
|
12,270
|
|
|
24.67
|
|
|
7,312
|
|
|
20.17
|
|
||
Granted
|
1,781
|
|
|
46.36
|
|
|
|
|
|
||||
Exercised
|
(1,886
|
)
|
|
17.64
|
|
|
|
|
|
||||
Canceled
|
(53
|
)
|
|
33.13
|
|
|
|
|
|
||||
Outstanding, December 27, 2019
|
12,112
|
|
|
$
|
28.91
|
|
|
8,231
|
|
|
$
|
23.75
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of
Prices
|
|
Options
Outstanding
|
|
Weighted Average
Remaining
Contractual Term
in Years
|
|
Weighted Average
Exercise Price
|
|
Options
Exercisable
|
|
Weighted Average
Exercise Price
|
||||||
$5 - $20
|
|
2,513
|
|
|
2.1
|
|
$
|
16.46
|
|
|
2,513
|
|
|
$
|
16.46
|
|
$20 - $30
|
|
5,141
|
|
|
5.5
|
|
25.09
|
|
|
4,671
|
|
|
25.20
|
|
||
$30 - $40
|
|
1,549
|
|
|
7.2
|
|
30.74
|
|
|
731
|
|
|
30.77
|
|
||
$40 - $51
|
|
2,909
|
|
|
8.9
|
|
45.46
|
|
|
316
|
|
|
44.05
|
|
||
$5 - $51
|
|
12,112
|
|
|
5.8
|
|
$
|
28.91
|
|
|
8,231
|
|
|
$
|
23.75
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash received
|
$
|
32,749
|
|
|
$
|
11,158
|
|
|
$
|
48,833
|
|
Aggregate intrinsic value
|
57,419
|
|
|
57,979
|
|
|
119,442
|
|
|||
Tax benefit realized
|
12,000
|
|
|
12,000
|
|
|
42,000
|
|
|
Total Shares
Authorized
|
|
Available for Future
Issuance as of December 27, 2019 |
||
Stock Incentive Plan (2019)
|
10,000
|
|
|
9,413
|
|
Employee Stock Purchase Plan (2006)
|
21,000
|
|
|
12,897
|
|
Total
|
31,000
|
|
|
22,310
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Share-based compensation
|
$
|
26,669
|
|
|
$
|
25,565
|
|
|
$
|
23,652
|
|
Tax benefit
|
2,100
|
|
|
3,500
|
|
|
5,100
|
|
|||
Share-based compensation, net of tax
|
$
|
24,569
|
|
|
$
|
22,065
|
|
|
$
|
18,552
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Expected life in years
|
6.8
|
|
|
7.5
|
|
|
7.0
|
|
|||
Interest rate
|
2.3
|
%
|
|
2.8
|
%
|
|
2.2
|
%
|
|||
Volatility
|
24.0
|
%
|
|
25.5
|
%
|
|
26.7
|
%
|
|||
Dividend yield
|
1.4
|
%
|
|
1.2
|
%
|
|
1.6
|
%
|
|||
Weighted average fair value per share
|
$
|
11.31
|
|
|
$
|
12.84
|
|
|
$
|
8.08
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Expected life in years
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|||
Interest rate
|
2.6
|
%
|
|
2.1
|
%
|
|
0.9
|
%
|
|||
Volatility
|
22.7
|
%
|
|
21.3
|
%
|
|
22.3
|
%
|
|||
Dividend yield
|
1.4
|
%
|
|
1.2
|
%
|
|
1.5
|
%
|
|||
Weighted average fair value per share
|
$
|
11.36
|
|
|
$
|
10.28
|
|
|
$
|
7.32
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net earnings available to common shareholders
|
$
|
343,853
|
|
|
$
|
341,054
|
|
|
$
|
252,412
|
|
Weighted average shares outstanding for basic earnings per share
|
166,515
|
|
|
167,364
|
|
|
167,925
|
|
|||
Dilutive effect of stock options computed based on the treasury stock method using the average market price
|
5,109
|
|
|
5,849
|
|
|
6,393
|
|
|||
Weighted average shares outstanding for diluted earnings per share
|
171,624
|
|
|
173,213
|
|
|
174,318
|
|
|||
Basic earnings per share
|
$
|
2.06
|
|
|
$
|
2.04
|
|
|
$
|
1.50
|
|
Diluted earnings per share
|
$
|
2.00
|
|
|
$
|
1.97
|
|
|
$
|
1.45
|
|
|
Level
|
|
2019
|
|
2018
|
||||
Cash and cash equivalents(1)
|
1
|
|
$
|
(156
|
)
|
|
$
|
927
|
|
Insurance contract
|
3
|
|
27,675
|
|
|
26,364
|
|
||
Investments categorized in fair value hierarchy
|
|
|
27,519
|
|
|
27,291
|
|
||
Equity
|
|
|
|
|
|
||||
U.S. Large Cap
|
N/A
|
|
84,330
|
|
|
53,597
|
|
||
U.S. Small/Mid Cap
|
N/A
|
|
9,202
|
|
|
7,602
|
|
||
International
|
N/A
|
|
39,240
|
|
|
31,586
|
|
||
Total Equity
|
|
|
132,772
|
|
|
92,785
|
|
||
Fixed income
|
N/A
|
|
107,832
|
|
|
76,213
|
|
||
Real estate and other
|
N/A
|
|
35,821
|
|
|
72,964
|
|
||
Investments measured at net asset value
|
|
|
276,425
|
|
|
241,962
|
|
||
Total
|
|
|
$
|
303,944
|
|
|
$
|
269,253
|
|
|
2019
|
|
2018
|
||||
Balance, beginning of year
|
$
|
26,364
|
|
|
$
|
26,411
|
|
Purchases
|
2,151
|
|
|
2,074
|
|
||
Redemptions
|
(1,326
|
)
|
|
(2,086
|
)
|
||
Unrealized gains (losses)
|
486
|
|
|
(35
|
)
|
||
Balance, end of year
|
$
|
27,675
|
|
|
$
|
26,364
|
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Obligation, beginning of year
|
$
|
371,282
|
|
|
$
|
393,559
|
|
|
$
|
27,778
|
|
|
$
|
27,771
|
|
Service cost
|
7,735
|
|
|
8,487
|
|
|
545
|
|
|
636
|
|
||||
Interest cost
|
15,103
|
|
|
13,424
|
|
|
1,162
|
|
|
1,084
|
|
||||
Actuarial loss (gain)
|
67,756
|
|
|
(30,452
|
)
|
|
2,532
|
|
|
(397
|
)
|
||||
Benefit payments
|
(12,594
|
)
|
|
(11,265
|
)
|
|
(1,371
|
)
|
|
(1,316
|
)
|
||||
Settlements
|
—
|
|
|
(1,561
|
)
|
|
—
|
|
|
—
|
|
||||
Exchange rate changes
|
137
|
|
|
(910
|
)
|
|
—
|
|
|
—
|
|
||||
Obligation, end of year
|
$
|
449,419
|
|
|
$
|
371,282
|
|
|
$
|
30,646
|
|
|
$
|
27,778
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value, beginning of year
|
$
|
269,253
|
|
|
$
|
254,186
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on assets
|
44,743
|
|
|
(13,875
|
)
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
2,276
|
|
|
42,023
|
|
|
1,371
|
|
|
1,316
|
|
||||
Benefit payments
|
(12,594
|
)
|
|
(11,265
|
)
|
|
(1,371
|
)
|
|
(1,316
|
)
|
||||
Settlements
|
—
|
|
|
(1,561
|
)
|
|
—
|
|
|
—
|
|
||||
Exchange rate changes
|
266
|
|
|
(255
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value, end of year
|
$
|
303,944
|
|
|
$
|
269,253
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status
|
$
|
(145,475
|
)
|
|
$
|
(102,029
|
)
|
|
$
|
(30,646
|
)
|
|
$
|
(27,778
|
)
|
Amounts recognized in consolidated balance sheets
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
2,931
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
1,824
|
|
|
1,453
|
|
|
1,656
|
|
|
1,573
|
|
||||
Non-current liabilities
|
146,582
|
|
|
100,576
|
|
|
28,990
|
|
|
26,205
|
|
||||
Net
|
$
|
145,475
|
|
|
$
|
102,029
|
|
|
$
|
30,646
|
|
|
$
|
27,778
|
|
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
402,900
|
|
|
$
|
371,282
|
|
Accumulated benefit obligation
|
363,497
|
|
|
343,705
|
|
||
Fair value of plan assets
|
254,493
|
|
|
269,253
|
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost-benefits earned during the period
|
$
|
7,735
|
|
|
$
|
8,487
|
|
|
$
|
7,675
|
|
|
$
|
545
|
|
|
$
|
636
|
|
|
$
|
601
|
|
Interest cost on projected benefit obligation
|
15,103
|
|
|
13,424
|
|
|
15,044
|
|
|
1,162
|
|
|
1,084
|
|
|
1,093
|
|
||||||
Expected return on assets
|
(17,152
|
)
|
|
(17,447
|
)
|
|
(17,186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
279
|
|
|
279
|
|
|
255
|
|
|
—
|
|
|
—
|
|
|
(344
|
)
|
||||||
Amortization of net loss (gain)
|
8,392
|
|
|
7,931
|
|
|
8,634
|
|
|
273
|
|
|
646
|
|
|
334
|
|
||||||
Settlement loss (gain)
|
—
|
|
|
184
|
|
|
12,313
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cost of pension plans which are not significant and have not adopted ASC 715
|
110
|
|
|
106
|
|
|
122
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||||
Net periodic benefit cost
|
$
|
14,467
|
|
|
$
|
12,964
|
|
|
$
|
26,857
|
|
|
$
|
1,980
|
|
|
$
|
2,366
|
|
|
$
|
1,684
|
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss (gain) arising during the period
|
$
|
40,184
|
|
|
$
|
644
|
|
|
$
|
2,532
|
|
|
$
|
(397
|
)
|
Amortization of net gain (loss)
|
(8,392
|
)
|
|
(7,931
|
)
|
|
(273
|
)
|
|
(646
|
)
|
||||
Settlement gain (loss)
|
—
|
|
|
(184
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit (cost)
|
(279
|
)
|
|
(279
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
31,513
|
|
|
$
|
(7,750
|
)
|
|
$
|
2,259
|
|
|
$
|
(1,043
|
)
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Prior service cost (credit)
|
$
|
1,197
|
|
|
$
|
1,465
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss
|
135,910
|
|
|
104,127
|
|
|
8,052
|
|
|
5,793
|
|
||||
Net before income taxes
|
137,107
|
|
|
105,592
|
|
|
8,052
|
|
|
5,793
|
|
||||
Income taxes
|
(29,666
|
)
|
|
(23,221
|
)
|
|
(1,772
|
)
|
|
(1,275
|
)
|
||||
Net
|
$
|
107,441
|
|
|
$
|
82,371
|
|
|
$
|
6,280
|
|
|
$
|
4,518
|
|
|
Pension
Benefits
|
|
Postretirement
Medical Benefits
|
||||
Prior service cost (credit)
|
$
|
282
|
|
|
$
|
—
|
|
Net loss (gain)
|
10,354
|
|
|
707
|
|
||
Net before income taxes
|
10,636
|
|
|
707
|
|
||
Income taxes
|
(2,340
|
)
|
|
(156
|
)
|
||
Net
|
$
|
8,296
|
|
|
$
|
551
|
|
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||
Weighted average assumptions
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
U.S. Plans
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
3.5
|
%
|
|
4.5
|
%
|
|
3.4
|
%
|
|
4.5
|
%
|
Rate of compensation increase
|
|
2.8
|
%
|
|
2.8
|
%
|
|
N/A
|
|
|
N/A
|
|
Non-U.S. Plans
|
|
|
|
|
|
|
|
|
||||
Discount rate
|
|
0.4
|
%
|
|
1.3
|
%
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
|
1.3
|
%
|
|
1.4
|
%
|
|
N/A
|
|
|
N/A
|
|
|
|
Pension Benefits
|
|
Postretirement Medical Benefits
|
||||||||||||||
Weighted average assumptions
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
U.S. Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
4.5
|
%
|
|
3.9
|
%
|
|
4.5
|
%
|
|
4.5
|
%
|
|
3.9
|
%
|
|
4.5
|
%
|
Rate of compensation increase
|
|
2.8
|
%
|
|
2.8
|
%
|
|
2.8
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Expected return on assets
|
|
7.0
|
%
|
|
7.1
|
%
|
|
7.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Non-U.S. Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
|
1.3
|
%
|
|
1.0
|
%
|
|
0.9
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Rate of compensation increase
|
|
1.4
|
%
|
|
0.9
|
%
|
|
1.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Expected return on assets
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Pension
Benefits
|
|
Postretirement
Medical Benefits
|
||||
2020
|
$
|
15,337
|
|
|
$
|
1,656
|
|
2021
|
16,520
|
|
|
1,707
|
|
||
2022
|
17,917
|
|
|
1,731
|
|
||
2023
|
19,173
|
|
|
1,727
|
|
||
2024
|
21,281
|
|
|
1,703
|
|
||
Years 2025-2029
|
115,303
|
|
|
8,357
|
|
2020
|
$
|
8,222
|
|
2021
|
8,237
|
|
|
2022
|
5,657
|
|
|
2023
|
4,226
|
|
|
2024
|
1,843
|
|
|
Thereafter
|
7,490
|
|
|
Total lease payments
|
$
|
35,675
|
|
Present value adjustment
|
(3,809
|
)
|
|
Operating lease liabilities
|
$
|
31,866
|
|
2019
|
$
|
11,613
|
|
2020
|
8,759
|
|
|
2021
|
6,745
|
|
|
2022
|
5,102
|
|
|
2023
|
3,721
|
|
|
Thereafter
|
2,340
|
|
|
Total
|
$
|
38,280
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
||||||||
2019
|
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
$
|
404,870
|
|
|
$
|
428,328
|
|
|
$
|
400,555
|
|
|
$
|
412,292
|
|
|
Gross Profit
|
216,042
|
|
|
226,954
|
|
|
207,379
|
|
|
209,381
|
|
|
||||
Net Earnings
|
86,749
|
|
|
88,137
|
|
|
84,132
|
|
|
84,835
|
|
|
||||
Basic Net Earnings per Common Share
|
$
|
0.52
|
|
|
$
|
0.53
|
|
|
$
|
0.50
|
|
|
$
|
0.51
|
|
|
Diluted Net Earnings per Common Share
|
0.51
|
|
|
0.51
|
|
|
0.49
|
|
|
0.49
|
|
|
||||
Cash Dividends Declared per Common Share
|
0.16
|
|
|
0.16
|
|
|
0.16
|
|
|
0.18
|
|
|
2018
|
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
$
|
406,348
|
|
|
$
|
424,570
|
|
|
$
|
415,936
|
|
|
$
|
406,438
|
|
|
Gross Profit
|
222,421
|
|
|
229,903
|
|
|
221,459
|
|
|
208,756
|
|
|
||||
Net Earnings
|
85,510
|
|
|
89,140
|
|
|
92,681
|
|
|
73,723
|
|
|
||||
Basic Net Earnings per Common Share
|
$
|
0.51
|
|
|
$
|
0.53
|
|
|
$
|
0.55
|
|
|
$
|
0.44
|
|
|
Diluted Net Earnings per Common Share
|
0.49
|
|
|
0.51
|
|
|
0.54
|
|
|
0.43
|
|
|
||||
Cash Dividends Declared per Common Share
|
0.13
|
|
|
0.13
|
|
|
0.13
|
|
|
0.16
|
|
|
(a)
|
The following documents are filed as part of this report:
|
|
|
Page
|
(1)
|
||
|
|
|
(2)
|
Financial Statement Schedule
|
|
|
||
|
|
|
|
All other schedules are omitted because they are not applicable, or are not required, or because the required information is included in the Consolidated Financial Statements or Notes thereto.
|
|
|
|
|
(3)
|
||
|
Those entries marked by an asterisk are Management Contracts, Compensatory Plans or Arrangements.
|
|
|
Allowance for
Doubtful Accounts
|
||
Balance, December 30, 2016
|
$
|
3,900
|
|
Additions charged to costs and expenses
|
1,600
|
|
|
Deductions from reserves (1)
|
(1,700
|
)
|
|
Other additions (deductions) (2)
|
200
|
|
|
Balance, December 29, 2017
|
4,000
|
|
|
Additions charged to costs and expenses
|
1,400
|
|
|
Deductions from reserves (1)
|
(900
|
)
|
|
Other additions (deductions) (2)
|
300
|
|
|
Balance, December 28, 2018
|
4,800
|
|
|
Additions charged to costs and expenses
|
800
|
|
|
Deductions from reserves (1)
|
(900
|
)
|
|
Other additions (deductions) (2)
|
100
|
|
|
Balance, December 27, 2019
|
$
|
4,800
|
|
(1)
|
Represents amounts determined to be uncollectible and charged against reserves, net of collections on accounts previously charged against reserves.
|
(2)
|
Includes amounts assumed or established in connection with acquisitions and effects of foreign currency translation.
|
*10.12
|
|
|
Stock Option Agreement. Form of agreement used for award of nonstatutory stock options to nonemployee directors under the Graco Inc. 2010 Stock Incentive Plan in 2011. (Incorporated by reference to Exhibit 10.16 to the Company’s 2010 Annual Report on Form 10-K.) Amended form of agreement for awards made to nonemployee directors commencing in 2012 (and subsequently used for awards made to nonemployee directors under the Graco Inc. 2015 Stock Incentive Plan in 2015). (Incorporated by reference to Exhibit 10.4 of the Company’s Report on Form 10-Q for the thirteen weeks ended March 30, 2012.)
|
|
|
|
|
*10.13
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to executive officers under the Graco Inc. Amended and Restated Stock Incentive Plan (2006) in 2007. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 30, 2007.) Amended form of agreement for awards made to executive officers in 2008, 2009 and 2010. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 28, 2008.)
|
|
|
|
|
*10.14
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to Chief Executive Officer under the Graco Inc. Amended and Restated Stock Incentive Plan (2006) in 2007. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 30, 2007.) Amended form of agreement for awards made to Chief Executive Officer in 2008, 2009 and 2010. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 28, 2008.)
|
|
|
|
|
*10.15
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to executive officers under the Graco Inc. 2010 Stock Incentive Plan in 2011. (Incorporated by reference to Exhibit 10.4 to the Company’s Report on Form 10-Q for the thirteen weeks ended April 1, 2011.) Amended form of agreement for awards made to executive officers commencing in 2012. (Incorporated by reference to Exhibit 10.3 of the Company’s Report on Form 10-Q for the thirteen weeks ended March 30, 2012.)
|
|
|
|
|
*10.16
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to Chief Executive Officer under the Graco Inc. 2010 Stock Incentive Plan in 2011. (Incorporated by reference to Exhibit 10.3 to the Company’s Report on Form 10-Q for the thirteen weeks ended April 1, 2011.) Amended form of agreement for awards made to Chief Executive Officer commencing in 2012. (Incorporated by reference to Exhibit 10.2 of the Company’s Report on Form 10-Q for the thirteen weeks ended March 30, 2012.)
|
|
|
|
|
*10.17
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to Chief Executive Officer under the Graco Inc. 2015 Stock Incentive Plan in 2016. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 25, 2016.)
|
|
|
|
|
*10.18
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to executive officers under the Graco Inc. 2015 Stock Incentive Plan in 2016. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 10-Q for the thirteen weeks ended March 25, 2016.)
|
|
|
|
|
*10.19
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to nonemployee directors under the Graco Inc. 2015 Stock Incentive Plan in 2016. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q for the thirteen weeks ended June 24, 2016.)
|
|
|
|
|
*10.20
|
|
|
Stock Option Agreement. Form of agreement used for award of non-incentive stock options to nonemployee directors under the Graco Inc. 2019 Stock Incentive Plan in 2019. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 10-Q for the thirteen weeks ended June 28, 2019.)
|
|
|
|
|
*10.21
|
|
|
|
|
|
|
|
*10.22
|
|
|
|
|
|
|
|
*10.23
|
|
|
Nonemployee Director Stock and Deferred Stock Program. (Incorporated by reference to Exhibit 10.22 to the Company’s 2009 Annual Report on Form 10-K/A.)
|
|
|
|
|
*10.24
|
|
|
Nonemployee Director Stock and Deferred Stock Program (2019 Restatement). (Incorporated by reference to Exhibit 10.3 to the Company’s Report on Form 10-Q for the thirteen weeks ended June 28, 2019.)
|
|
|
|
|
*10.25
|
|
|
Key Employee Agreement. Form of agreement used with Chief Executive Officer. (Incorporated by reference to Exhibit 10.24 to the Company’s 2007 Annual Report on Form 10-K.)
|
|
|
|
|
*10.26
|
|
|
Key Employee Agreement. Form of agreement used with executive officers other than the Chief Executive Officer. (Incorporated by reference to Exhibit 10.25 to the Company’s 2007 Annual Report on Form 10-K.)
|
|
|
|
|
10.27
|
|
|
Executive Group Long-Term Disability Policy as revised in 1995. (Incorporated by reference to Exhibit 10.23 to the Company’s 2004 Annual Report on Form 10-K.) Enhanced by Supplemental Income Protection Plan in 2004. (Incorporated by reference to Exhibit 10.28 to the Company’s 2007 Annual Report on Form 10-K.)
|
|
|
|
10.28
|
|
|
Omnibus Amendment, dated June 26, 2014, amending and restating the Credit Agreement among Graco Inc., the borrowing subsidiaries from time to time party thereto, the banks from time to time party thereto and U.S. Bank National Association, as administrative agent. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 8-K filed July 1, 2014.) Third Amendment to Credit Agreement, dated December 15, 2016, amending the Credit Agreement among Graco Inc., the borrowing subsidiaries from time to time party thereto, the banks from time to time party thereto and U.S. Bank National Association, as administrative agent. (Incorporated by reference to Exhibit 10.1 to the Company’s Report 8-K filed December 20, 2016.) Fourth amendment to Credit Agreement, dated May 23, 2017, amending the Credit Agreement among Graco Inc., the borrowing subsidiaries from time to time party thereto, the banks from time to time party thereto and U.S. Bank National Association, as administrative agent. (Incorporated by reference to Exhibit 10.2 to the Company's 10-Q filed for the thirteen weeks ended June 30, 2017.)
|
|
|
|
|
10.29
|
|
|
Note Agreement, dated March 11, 2011, between Graco Inc. and the Purchasers listed on the Purchaser Schedule attached thereto, which includes as exhibits the form of Senior Notes. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 8-K filed March 16, 2011.) Amendment No. 1 dated May 23, 2011. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 10-Q for the thirteen weeks ended July 1, 2011.) Amendment and Restatement No. 1 to Note Agreement dated as of March 27, 2012. (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 8-K filed April 2, 2012.) Amendment No. 2 dated as of June 26, 2014 to Note Agreement dated as of March 11, 2011. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q filed for the thirteen weeks ended June 27, 2014.) Amendment No. 3 dated as of December 15, 2016 to Note Agreement dated as of March 11, 2011. (Incorporated by reference to Exhibit 10.28 to the Company's 2016 Annual Report on Form 10-K .) Amendment No. 4 dated May 23, 2017 to Note Agreement dated as of March 11, 2011. (Incorporated by reference to Exhibit 10.1 to the Company's 10-Q filed for the thirteen weeks ended June 30, 2017.)
|
|
|
|
|
10.30
|
|
|
Master Note Agreement, dated January 29, 2020, between Graco Inc. and NYL Investors LLC. (Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 8-K filed February 3, 2020.)
|
|
|
|
|
11
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
101
|
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T formatted in iXBRL (Inline eXtensible Business Reporting Language).
|
104
|
|
|
Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).
|
/s/ PATRICK J. MCHALE
|
|
February 18, 2020
|
Patrick J. McHale
|
|
|
President and Chief Executive Officer
|
|
|
/s/ PATRICK J. MCHALE
|
|
February 18, 2020
|
Patrick J. McHale
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ MARK W. SHEAHAN
|
|
February 18, 2020
|
Mark W. Sheahan
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal Financial Officer)
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/s/ CAROLINE M. CHAMBERS
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February 18, 2020
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Caroline M. Chambers
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Executive Vice President, Corporate Controller and Information Systems
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(Principal Accounting Officer)
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Lee R. Mitau
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Director, Chairman of the Board
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William J. Carroll
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Director
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Eric P. Etchart
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Director
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Jack W. Eugster
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Director
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Jody H. Feragen
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Director
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J. Kevin Gilligan
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Director
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Patrick J. McHale
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Director
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Martha A. Morfitt
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Director
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R. William Van Sant
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Director
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Emily C. White
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Director
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/s/ PATRICK J. MCHALE
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February 18, 2020
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Patrick J. McHale
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(For himself and as attorney-in-fact)
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Graco Inc. Non-Qualified Stock Option Agreement
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[Grant Plan Long Name]
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Graco Inc., a Minnesota corporation, (the “Company”), pursuant to the terms of the Graco Inc. 2019 Stock Incentive Plan (the “Plan”), wishes to grant this Option (as defined in the Terms and Conditions below) to you (“Employee”).
You must carefully read the Terms and Conditions governing this Option, as well as the Prospectus and any other documents provided in connection with the Option grant. Be sure you understand these documents and what your responsibilities and obligations are before acknowledging receipt of the Option. If you are not willing to agree to the Option Terms and Conditions, you must not accept the Option and you should not sign the Option Grant Acknowledgment and Agreement. If you accept the Option, you are accepting all of the Terms and Conditions that are applicable to your receipt of the Option. If you do not accept the Option, you are forfeiting your right to receive any potential benefits from the Option.
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Participant: XXXX
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Global ID: XXXXXXX
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Award Type: XXXXXX
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Date of Grant: XXXX
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Award Expiration Date: XXXXX
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Shares Granted: XXXXXX
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Award Price: XX.XXUSD
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Note: The statements above are qualified in their entirety by the Terms and Conditions below, and should be read in conjunction with such Terms and Conditions.
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1.
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Grant of Option
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2.
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Duration and Exercisability
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A.
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No portion of this Option may be exercised by Employee until the first anniversary of the Date of Grant and then only in accordance with the Vesting Schedule set forth below. In no event shall this Option or any portion of this Option be exercisable following the tenth anniversary of the Date of Grant.
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Vesting Date
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Portion of Option Exercisable
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First Anniversary of Date of Grant
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25%
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Second Anniversary of Date of Grant
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50%
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Third Anniversary of Date of Grant
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75%
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Fourth Anniversary of Date of Grant
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100%
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B.
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During the lifetime of Employee, the Option shall be exercisable only by Employee and shall not be assignable or transferable by Employee otherwise than (i) by will or the laws of descent and distribution, or (ii) by designating a beneficiary or beneficiaries (in a manner established by the Management Organization and Compensation Committee of the Board of Directors of the Company (the “Committee”)) to exercise the rights of Employee and receive any property distributable with respect to the Option upon the death of the Employee (any person to whom the Option has been transferred pursuant to this Section 2B, a “Transferee”). The Transferee shall be subject to the provisions of the Agreement, and, as a condition to the transfer of the Option becoming effective, the Transferee shall agree to be bound by the provisions of this Agreement.
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C.
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Under no circumstances may the Option or any portion of the Option granted by this Agreement be exercised after the term of the Option expires.
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3.
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Effect of Termination of Employment
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A.
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If Employee’s employment terminates for any reason other than Employee’s gross and willful misconduct, death, retirement (as defined in Section 3D), or disability (as defined in Section 3D), any portion of the Option that was exercisable as of the date of termination of employment shall be exercisable at any time within the period beginning on the day after termination of Employee’s employment and ending at the close of trading on the Exchange ninety (90) days later.
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B.
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If Employee’s employment terminates by reason of Employee’s gross and willful misconduct during employment, including, but not limited to, wrongful appropriation of Company or affiliate funds, serious violations of Company policy, breach of fiduciary duty or the conviction of a felony, the unexercised portion of the Option shall terminate as of the time of the misconduct. If the Company determines subsequent to the termination of Employee’s employment for whatever reason, that Employee engaged in conduct during employment that would constitute gross and willful misconduct justifying termination, the Option shall terminate as of the time of such misconduct. Furthermore, if the Option is exercised in whole or in part and the Company thereafter determines that Employee engaged in gross and willful misconduct during employment which would have justified termination at any time prior to the date of such exercise, the Option shall be deemed to have terminated as of the time of the misconduct and the Company may elect to rescind the Option exercise. Gross and willful misconduct shall not include any action or inaction by the Employee contrary to the direction of the Board with respect to any initiative, strategy or action of the Company, which action or inaction the Employee believes is in the best interest of the Company.
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C.
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If Employee shall die while employed by the Company or an affiliate and shall not have fully exercised the Option, all shares remaining under the Option shall become immediately exercisable. If Employee shall die within ninety (90) days after a termination of employment which meets the criteria of Section 3A above, only the portion of the Option for those shares that are vested as of the date of termination shall be exercisable. The executor or administrator of Employee’s estate or any Transferee may exercise the portion of such exercisable Option at any time during a period beginning on the day after the date of Employee’s death and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant.
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D.
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If Employee’s termination of employment is due to retirement or disability, all shares remaining under the Option shall become immediately exercisable. Employee shall be deemed to have retired if the termination of employment occurs for reasons other than the Employee’s gross and willful misconduct, death, or disability after Employee (i) has attained age 55 and 10 years of service with the Company or an affiliate, or (ii) has attained age 65. Employee shall be deemed to be disabled if the termination of employment occurs because Employee is unable to work due to an impairment which would qualify as a disability under the Company’s long term disability program. Employee may exercise the portion of the Option remaining unexercised at any time during a period beginning on the day after the date of Employee’s termination of employment and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant. If Employee should die during the period between the date of Employee’s retirement or disability and the expiration of the Option, the unexercised portion of the Option shall be exercisable at any time during a period beginning the day after the date of Employee’s death and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant.
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E.
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Notwithstanding anything to the contrary contained in this Section 3, if Employee’s employment is terminated by retirement (as defined in Section 3D) and Employee has not given written notice to the Chair of the Committee, of Employee’s intention to retire not less than six (6) months prior to the date of Employee’s retirement, then in such event, for purposes of this Agreement only, said termination of employment shall be deemed to be not a retirement but a termination subject to the provisions of Section 3A, provided, however, that in the event that the Committee determines that said termination of employment without six (6) months prior written notice is in the best interests of the Company, such termination shall be deemed to be a retirement and shall be subject to Section 3D.
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F.
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If the Option is exercised by a Transferee or the executors or administrators of the estate of a deceased optionee, the Company shall be under no obligation to issue stock hereunder unless and until the Company is satisfied that the person(s) exercising the Option is the validly designated beneficiary or the duly appointed legal representative of the deceased optionee’s estate or the proper legatee or distributee thereof.
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G.
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For purposes of this Section 3, if the last day of the relevant period is a day upon which the Exchange is not open for trading or the Common Stock is not trading on that day, the relevant period will expire at the close of trading on such earlier business day on which the Exchange is open and the Common Stock is trading.
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4.
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Manner of Exercise
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A.
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Employee or other proper party may exercise the Option only by delivering within the term of the Option written notice to the Company at its principal office in Minneapolis, Minnesota, stating the number of shares as to which the Option is being exercised and, except as provided in Sections 4B(2), 4B(3) and 4B(4), accompanied by payment-in-full of the Option price for all shares designated in the notice.
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B.
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The Employee may, at Employee’s election, pay the Option price as follows:
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(1)
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by cash or check (bank check, certified check, or personal check);
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(2)
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by delivering to the Company for cancellation, shares of Common Stock of the Company which have a fair market value equal to the Option price;
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(3)
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if the Employee is still serving as an executive officer of the Company on the date of exercise, by a reduction in the number of shares of Common Stock to be delivered upon exercise, which number of shares to be withheld shall have an aggregate fair market value on the date of exercise equal to the exercise price; or
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(4)
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by delivering to the Company a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Company from sale or loan proceeds the amount required to pay the exercise price.
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5.
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Payment of Withholding Taxes
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6.
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Change of Control
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A.
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Notwithstanding Section 2A hereof, the entire Option shall become immediately and fully exercisable upon a “Change of Control” and shall remain fully exercisable until either exercised or expiring by its terms. A “Change of Control” means:
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(1)
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an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) which, together with other acquisitions by such Person, results in the aggregate beneficial ownership by such Person of 30% or more of either
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(a)
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the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or
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(b)
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the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”);
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(i)
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an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company,
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(ii)
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an acquisition by the Employee or any group that includes the Employee, or
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(iii)
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an acquisition by any entity pursuant to a transaction that complies with clauses (a), (b) and (c) of Section 6A(3) below; or
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(2)
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Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of said Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial membership on the Board occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies by or on behalf of a Person other than the Board; or
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(3)
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Consummation of a reorganization, merger or consolidation of the Company with or into another entity or a statutory exchange of Outstanding Company Common Stock or Outstanding Company Voting Securities or sale or other disposition of all or substantially all of the assets of the Company (“Business Combination”); excluding, however, such a Business Combination pursuant to which
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(a)
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all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, a majority of, respectively, the then outstanding shares of common stock and the combined
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(b)
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no Person (excluding (i) any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination or any entity controlled by the Company or the entity resulting from such Business Combination, (ii) any entity beneficially owning 100% of the outstanding shares of common stock and the combined voting power of the then outstanding voting securities (or comparable equity securities) or all or substantially all of the Company’s assets either directly or indirectly and (iii) the Employee and any group that includes the Employee) beneficially owns, directly or indirectly, 30% or more of the then outstanding shares of common stock (or comparable equity interests) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities (or comparable equity interests) of such entity, and
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(c)
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immediately after the Business Combination, a majority of the members of the board of directors (or comparable governors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
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(4)
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approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
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7.
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Adjustments; Fundamental Change
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A.
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If there shall be any change in the number or character of the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (of whatever amount), stock split or other change in the corporate structure of the Company, and all or any portion of the Option shall then be unexercised and not yet expired, appropriate adjustments in the outstanding Option shall be made by the Company, in order to prevent dilution or enlargement of Employee’s Option rights. Such adjustments shall include, where appropriate, changes in the number of shares of Common Stock and the price per share subject to the outstanding Option.
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B.
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In the event of a proposed (i) dissolution or liquidation of the Company, (ii) a sale of substantially all of the assets of the Company, (iii) a merger or consolidation of the Company with or into any other corporation, regardless of whether the Company is the surviving corporation, or (iv) a statutory share exchange involving the capital stock of the Company (each, a “Fundamental Change”), the Committee may, but shall not be obligated to:
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(1)
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with respect to a Fundamental Change that involves a merger, consolidation or statutory share exchange, make appropriate provision for the protection of the Option by the substitution of options and appropriate voting common stock of the corporation surviving any such merger or consolidation or, if appropriate, the “parent corporation” (as defined in Section 424(e) of the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder, or any successor provision) of the Company or such surviving corporation, in lieu of the Option and shares of Common Stock of the Company, or
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(2)
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with respect to any Fundamental Change, including, without limitation, a merger, consolidation or statutory share exchange, declare, prior to the occurrence of the Fundamental Change, and provide written notice to the holder of the Option of the declaration, that the Option, whether or not then exercisable, shall be canceled at the time of, or immediately prior to the occurrence of, the Fundamental Change in exchange for payment to the holder of the Option, within 20 days after the Fundamental Change, of cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of consideration, including cash and/or property, singly or in such combination as the Committee shall determine, that the holder of the Option would have received as a result of the Fundamental Change if the holder of the Option had exercised the Option immediately prior to the Fundamental Change) equal to, for each share of Common Stock covered by the canceled Option, the amount, if any, by which the Fair Market Value (as defined in this Section 7B) per share of Common Stock exceeds the exercise price per share of Common Stock covered by the Option. At the time of the declaration provided for in the immediately preceding sentence, the Option shall immediately become exercisable in full and the holder of the Option shall have the right, during the period preceding the time of cancellation of the Option, to exercise the Option as to all or any part of the shares of Common Stock covered thereby in whole or in part, as the case may be. In the event of a declaration pursuant to this Section 7B, the Option, to the extent that it shall not have been exercised prior to the Fundamental Change, shall be canceled at the time of, or immediately prior to, the Fundamental Change, as provided in the declaration. Notwithstanding the foregoing, the holder of the Option shall not be entitled to the payment provided for in this Section 7B if such Option shall have expired or been forfeited. For purposes of this Section 7B only, “Fair Market Value” per share of Common Stock means the fair market value, as determined in good faith by the Committee, of the consideration to be received per share of Common Stock by the shareholders of the Company upon the occurrence of the Fundamental Change, notwithstanding anything to the contrary provided in this Agreement.
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8.
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Miscellaneous
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A.
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This Option is issued pursuant to the Plan and is subject to its terms. The terms of the Plan are available for inspection during business hours at the principal offices of the Company.
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B.
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This Agreement shall not confer on Employee any right with respect to continuance of employment by the Company or any of its subsidiaries, nor will it interfere in any way with the right of the Company to terminate such employment at any time.
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C.
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Neither Employee, the Employee’s legal representative, a Transferee, nor the executor(s) or administrator(s) of the Employee’s estate shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any shares of Common Stock receivable upon the exercise of this Option, in whole or in part, unless and until such shares shall have been issued upon exercise of this Option.
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D.
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The Company shall at all times during the term of the Option reserve and keep available such number of shares as will be sufficient to satisfy the requirements of this Agreement.
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E.
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The internal law, and not the law of conflicts, of the State of Minnesota, USA, shall govern all questions concerning the validity, construction and effect of this Agreement, the Plan and any rules and regulations relating to the Plan or this Option.
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F.
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Employee hereby consents to the transfer by Employee’s employer or the Company of information relating to Employee’s participation in the Plan, including the personal data set forth in this Agreement, between them or to other related parties in the United States or elsewhere, or to any financial institution or other third party engaged by the Company, but solely for the purpose of administering the Plan and this Option. Employee also consents to the storage and processing of such data by such persons for this purpose.
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Graco Inc. Non-Qualified Stock Option Agreement
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[Grant Plan Long Name]
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Graco Inc., a Minnesota corporation, (the “Company”), pursuant to the terms of the Graco Inc. 2019 Stock Incentive Plan (the “Plan”), wishes to grant this Option (as defined in the Terms and Conditions below) to you (“Employee”).
You must carefully read the Terms and Conditions governing this Option, as well as the Prospectus and any other documents provided in connection with the Option grant. Be sure you understand these documents and what your responsibilities and obligations are before acknowledging receipt of the Option. If you are not willing to agree to the Option Terms and Conditions, you must not accept the Option and you should not sign the Option Grant Acknowledgment and Agreement. If you accept the Option, you are accepting all of the Terms and Conditions that are applicable to your receipt of the Option.
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Participant: XXXX
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Global ID: XXXXXXX
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Award Type: XXXXXX
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Date of Grant: XXXX
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Award Expiration Date: XXXXX
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Shares Granted: XXXXXX
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Award Price: XX.XXUSD
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Note: The statements above are qualified in their entirety by the Terms and Conditions below, and should be read in conjunction with such Terms and Conditions.
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1.
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Grant of Option
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2.
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Duration and Exercisability
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A.
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No portion of this Option may be exercised by Employee until the first anniversary of the Date of Grant and then only in accordance with the Vesting Schedule set forth below. In no event shall this Option or any portion of this Option be exercisable following the tenth anniversary of the Date of Grant.
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Vesting Date
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Portion of Option Exercisable
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First Anniversary of Date of Grant
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25%
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Second Anniversary of Date of Grant
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50%
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Third Anniversary of Date of Grant
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75%
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Fourth Anniversary of Date of Grant
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100%
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B.
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During the lifetime of Employee, the Option shall be exercisable only by Employee and shall not be assignable or transferable by Employee otherwise than (i) by will or the laws of descent and distribution, or (ii) by designating a beneficiary or beneficiaries (in a manner established by the Management Organization and Compensation Committee of the Board of Directors of the Company (the “Committee”)) to exercise the rights of Employee and receive any property distributable with respect to the Option upon the death of the Employee (any person to whom the Option has been transferred pursuant to this Section 2B, a “Transferee”). The Transferee shall be subject to the provisions of the Agreement, and, as a condition to the transfer of the Option becoming effective, the Transferee shall agree to be bound by the provisions of this Agreement.
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C.
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Under no circumstances may the Option or any portion of the Option granted by this Agreement be exercised after the term of the Option expires.
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3.
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Effect of Termination of Employment
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A.
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If Employee’s employment terminates for any reason other than Employee’s gross and willful misconduct, death, retirement (as defined in Section 3D), or disability (as defined in Section 3D), any portion of the Option that was exercisable as of the date of termination of employment shall be exercisable at any time within the period beginning on the day after termination of Employee’s employment and ending at the close of trading on the Exchange ninety (90) days later.
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B.
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If Employee’s employment terminates by reason of Employee’s gross and willful misconduct during employment, including, but not limited to, wrongful appropriation of Company or affiliate funds, serious violations of Company policy, breach of fiduciary duty or the conviction of a felony, the unexercised portion of the Option shall terminate as of the time of the misconduct. If the Company determines subsequent to the termination of Employee’s employment for whatever reason, that Employee engaged in conduct during employment that would constitute gross and willful misconduct justifying termination, the Option shall terminate as of the time of such misconduct. Furthermore, if the Option is exercised in whole or in part and the Company thereafter determines that Employee engaged in gross and willful misconduct during employment which would have justified termination at any time prior to the date of such exercise, the Option shall be deemed to have terminated as of the time of the misconduct and the Company may elect to rescind the Option exercise.
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C.
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If Employee shall die while employed by the Company or an affiliate and shall not have fully exercised the Option, all shares remaining under the Option shall become immediately exercisable. If Employee shall die within ninety (90) days after a termination of employment which meets the criteria of Section 3A above, only the portion of the Option for those shares that are vested as of the date of termination shall be exercisable. The executor or administrator of Employee’s estate or any Transferee may exercise the portion of such exercisable Option at any time during a period beginning on the day after the date of Employee’s death and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant.
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D.
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If Employee’s termination of employment is due to retirement or disability, all shares remaining under the Option shall become immediately exercisable. Employee shall be deemed to have retired if the termination of employment occurs for reasons other than the Employee’s gross and willful misconduct, death, or disability after Employee (i) has attained age 55 and 10 years of service with the Company or an affiliate, or (ii) has attained age 65. Employee shall be deemed to be disabled if the termination of employment occurs because Employee is unable to work due to an impairment which would qualify as a disability under the Company’s long term disability program. Employee may exercise the portion of the Option remaining unexercised at any time during a period beginning on the day after the date of Employee’s termination of employment and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant. If Employee should die during the period between the date of Employee’s retirement or disability and the expiration of the Option, the unexercised portion of the Option shall be exercisable at any time during a period beginning the day after the date of Employee’s death and ending at the close of trading on the Exchange on the tenth anniversary of the Date of Grant.
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E.
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Notwithstanding anything to the contrary contained in this Section 3, if Employee’s employment is terminated by retirement (as defined in Section 3D) and Employee has not given the Company written notice to Employee’s immediate supervisor and the Chief Executive Officer, of Employee’s intention to retire not less than six (6) months prior to the date of Employee’s retirement, then in such event, for purposes of this Agreement only, said termination of employment shall be deemed to be not a retirement but a termination subject to the provisions of Section 3A, provided, however, that in the event that the Chief Executive Officer determines that said termination of employment without six (6) months prior written notice is in the best interests of the Company, such termination shall be deemed to be a retirement and shall be subject to Section 3D.
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F.
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If the Option is exercised by a Transferee or the executors or administrators of the estate of a deceased optionee, the Company shall be under no obligation to issue stock hereunder unless and until the Company is satisfied that the person(s) exercising the Option is the validly designated beneficiary or the duly appointed legal representative of the deceased optionee’s estate or the proper legatee or distributee thereof.
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G.
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For purposes of this Section 3, if the last day of the relevant period is a day upon which the Exchange is not open for trading or the Common Stock is not trading on that day, the relevant period will expire at the close of trading on such earlier business day on which the Exchange is open and the Common Stock is trading.
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4.
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Manner of Exercise
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A.
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Employee or other proper party may exercise the Option only by delivering within the term of the Option written notice to the Company at its principal office in Minneapolis, Minnesota, stating the number of shares as to which the Option is being exercised and, except as provided in Sections 4B(2), 4B(3) and 4B(4), accompanied by payment-in-full of the Option price for all shares designated in the notice.
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B.
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The Employee may, at Employee’s election, pay the Option price as follows:
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(1)
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by cash or check (bank check, certified check, or personal check);
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(2)
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by delivering to the Company for cancellation, shares of Common Stock of the Company which have a fair market value equal to the Option price;
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(3)
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if the Employee is still serving as an executive officer of the Company on the date of exercise, by a reduction in the number of shares of Common Stock to be delivered upon exercise, which number of shares to be withheld shall have an aggregate fair market value on the date of exercise equal to the exercise price; or
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(4)
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by delivering to the Company a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the Company from sale or loan proceeds the amount required to pay the exercise price.
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5.
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Payment of Withholding Taxes
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6.
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Change of Control
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A.
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Notwithstanding Section 2A hereof, the entire Option shall become immediately and fully exercisable upon a “Change of Control” and shall remain fully exercisable until either exercised or expiring by its terms. A “Change of Control” means:
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(1)
|
an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), (a “Person”), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) which, together with other acquisitions by such Person, results in the aggregate beneficial ownership by such Person of 30% or more of either
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(a)
|
the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or
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(b)
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the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”);
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(i)
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an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company,
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(ii)
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an acquisition by the Employee or any group that includes the Employee, or
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(iii)
|
an acquisition by any entity pursuant to a transaction that complies with clauses (a), (b) and (c) of Section 6A(3) below; or
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(2)
|
Individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of said Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial membership on the Board occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies by or on behalf of a Person other than the Board; or
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(3)
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Consummation of a reorganization, merger or consolidation of the Company with or into another entity or a statutory exchange of Outstanding Company Common Stock or Outstanding Company Voting Securities or sale or other disposition of all or substantially all of the assets of the Company (“Business Combination”); excluding, however, such a Business Combination pursuant to which
|
(a)
|
all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, a majority of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or comparable equity interests), as the case may be, of the surviving or acquiring entity resulting from such Business Combination (including, without limitation, an entity that as a result of such transaction beneficially owns 100% of the outstanding shares of common stock and the combined voting power of the then outstanding voting securities (or comparable equity securities) or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions (as compared to the other holders of the Company’s common stock and voting securities prior to the Business Combination) as their respective ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities,
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(b)
|
no Person (excluding (i) any employee benefit plan (or related trust) sponsored or maintained by the Company or such entity resulting from such Business Combination or any entity controlled by the Company or the entity resulting from such Business Combination, (ii) any entity beneficially owning 100% of the outstanding shares of common stock and the combined voting power of the then outstanding voting securities (or comparable equity securities) or all or substantially all of the Company’s assets either directly or indirectly and (iii) the Employee and any group that includes the Employee) beneficially owns, directly or indirectly, 30% or more of the then outstanding shares of common stock (or comparable equity interests) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities (or comparable equity interests) of such entity, and
|
(c)
|
immediately after the Business Combination, a majority of the members of the board of directors (or comparable governors) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
|
(4)
|
approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
7.
|
Adjustments; Fundamental Change
|
A.
|
If there shall be any change in the number or character of the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (of whatever amount), stock split or other change in the corporate structure of the Company, and all or any portion of the Option shall then be unexercised and not yet expired, appropriate adjustments in the outstanding Option shall be made by the Company, in order to prevent dilution or enlargement of Employee’s Option rights. Such adjustments shall include, where appropriate, changes in the number of shares of Common Stock and the price per share subject to the outstanding Option.
|
B.
|
In the event of a proposed (i) dissolution or liquidation of the Company, (ii) a sale of substantially all of the assets of the Company, (iii) a merger or consolidation of the Company with or into any other corporation, regardless of whether the Company is the surviving corporation, or (iv) a statutory share exchange involving the capital stock of the Company (each, a “Fundamental Change”), the Committee may, but shall not be obligated to:
|
(1)
|
with respect to a Fundamental Change that involves a merger, consolidation or statutory share exchange, make appropriate provision for the protection of the Option by the substitution of options and appropriate voting common stock of the corporation surviving any such merger or consolidation or, if appropriate, the “parent corporation” (as defined in Section 424(e) of the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder, or any successor provision) of the Company or such surviving corporation, in lieu of the Option and shares of Common Stock of the Company, or
|
(2)
|
with respect to any Fundamental Change, including, without limitation, a merger, consolidation or statutory share exchange, declare, prior to the occurrence of the Fundamental Change, and provide written notice to the holder of the Option of the declaration, that the Option, whether or not then exercisable, shall be canceled at the time of, or immediately prior to the occurrence of, the Fundamental Change in exchange for payment to the holder of the Option, within 20 days after the Fundamental Change, of cash (or, if the Committee so elects in lieu of solely cash, of such form(s) of consideration, including cash and/or property, singly or in such combination as the Committee shall determine, that the holder of the Option would have received as a result of the Fundamental Change if the holder of the Option had exercised the Option immediately prior to the Fundamental Change) equal to, for each share of Common Stock covered by the canceled Option, the amount, if any, by which the Fair Market Value (as defined in this Section 7B) per share of Common Stock exceeds the exercise price per share of Common Stock covered by the Option. At the time of the declaration provided for in the immediately preceding sentence, the Option shall immediately become exercisable in full and the holder of the Option shall have the right, during the period preceding the time of cancellation of the Option, to exercise the Option as to all or any part of the shares of Common Stock covered thereby in whole or in part, as the case may be. In the event of a declaration pursuant to this Section 7B, the Option, to the extent that it shall not have been exercised prior to the Fundamental Change, shall be canceled at the time of, or immediately prior to, the Fundamental Change, as provided in the declaration. Notwithstanding the foregoing, the holder of the Option shall not be entitled to the payment provided for in this Section 7B if such Option shall have expired or been forfeited. For purposes of this Section 7B only, “Fair Market Value” per share of Common Stock means the fair market value, as determined in good faith by the Committee, of the consideration to be received per share of Common Stock by the shareholders of the Company upon the occurrence of the Fundamental Change, notwithstanding anything to the contrary provided in this Agreement.
|
8.
|
Miscellaneous
|
A.
|
This Option is issued pursuant to the Plan and is subject to its terms. The terms of the Plan are available for inspection during business hours at the principal offices of the Company.
|
B.
|
This Agreement shall not create an employment relationship between Employee and the Company and shall not confer on Employee any right with respect to continuance of employment by the Company or any of its affiliates or subsidiaries, nor will it interfere in any way with the right of the Company to terminate such employment at any time.
|
C.
|
Neither Employee, the Employee’s legal representative, a Transferee, nor the executor(s) or administrator(s) of the Employee’s estate shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any shares of Common Stock receivable upon the exercise of this Option, in whole or in part, unless and until such shares shall have been issued upon exercise of this Option.
|
D.
|
This Option has been granted to Employee as a purely discretionary benefit and shall not form part of Employee’s salary or entitle Employee to receive similar option grants in the future. Benefits received under the Plan shall not be used in calculating severance payments, if any.
|
E.
|
The Company shall at all times during the term of the Option reserve and keep available such number of shares as will be sufficient to satisfy the requirements of this Agreement.
|
F.
|
The internal law, and not the law of conflicts, of the State of Minnesota, USA, shall govern all questions concerning the validity, construction and effect of this Agreement, the Plan and any rules and regulations relating to the Plan or this Option.
|
G.
|
Employee hereby consents to the transfer by Employee’s employer or the Company of information relating to Employee’s participation in the Plan, including the personal data set forth in this Agreement, between them or to other related parties in the United States or elsewhere, or to any financial institution or other third party engaged by the Company, but solely for the purpose of administering the Plan and this Option. Employee also consents to the storage and processing of such data by such persons for this purpose.
|
Subsidiary
|
Jurisdiction
of Organization
|
Ownership
Type1
|
Percent
Owned
|
Alco Components Limited
|
England and Wales, UK
|
Indirect
|
100%
|
Alco Valves Group Limited
|
England and Wales, UK
|
Indirect
|
100%
|
Alco Valves Singapore PTE Limited
|
Singapore
|
Indirect
|
100%
|
Alco Valves (US), Inc.
|
Texas, USA
|
Indirect
|
100%
|
Gema Europe s.r.l.
|
Italy
|
Indirect
|
100%
|
Gema México Powder Finishing, S. de R.L. de C.V.
|
Mexico
|
Direct & Indirect
|
100%
|
Gema (Shanghai) Co., Ltd.
|
P.R. China
|
Indirect
|
100%
|
Gema Switzerland GmbH
|
Switzerland
|
Indirect
|
100%
|
Gema USA Inc.
|
Minnesota, USA
|
Direct
|
100%
|
GFEC Free Zone Uruguay S.A.
|
Uruguay
|
Indirect
|
100%
|
GFEC Uruguay S.A.
|
Uruguay
|
Indirect
|
100%
|
GG Manufacturing s.r.l.
|
Romania
|
Indirect
|
100%
|
Graco Australia Pty Ltd
|
Australia
|
Indirect
|
100%
|
Graco BV
|
Belgium
|
Indirect
|
100%
|
Graco Canada Inc.
|
Canada
|
Indirect
|
100%
|
Graco Chile SpA
|
Chile
|
Direct
|
100%
|
Graco Colombia S.A.S.
|
Colombia
|
Direct
|
100%
|
Graco Distribution BV
|
Belgium
|
Indirect
|
100%
|
Graco do Brasil Ltda.
|
Brazil
|
Indirect
|
100%
|
Graco Finance Hong Kong Limited
|
Hong Kong, P.R. China
|
Direct
|
100%
|
Graco Fluid Equipment (Shanghai) Co., Ltd.
|
P.R. China
|
Direct
|
100%
|
Graco Fluid Equipment (Suzhou) Co., Ltd.
|
P.R. China
|
Indirect
|
100%
|
Graco Fluid Handling (D) Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Graco Fluid Handling (H) Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Graco Fluid Handling (I) Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Graco Global Holdings
|
Luxembourg
|
Indirect
|
100%
|
Graco GmbH
|
Germany
|
Indirect
|
100%
|
Graco High Pressure Equipment Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Graco Hong Kong Limited
|
Hong Kong, P.R. China
|
Indirect
|
100%
|
Graco India Private Limited
|
India
|
Indirect
|
100%
|
Graco International Holdings
|
Luxembourg
|
Indirect
|
100%
|
Graco K.K.
|
Japan
|
Indirect
|
100%
|
Graco Korea Inc.
|
South Korea
|
Indirect
|
100%
|
Graco Limited
|
England and Wales, UK
|
Indirect
|
100%
|
Graco Malaysia Sdn. Bhd.
|
Malaysia
|
Direct
|
100%
|
Graco Minnesota Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Graco Ohio Inc.
|
Ohio, USA
|
Direct
|
100%
|
Graco S.A.S.
|
France
|
Indirect
|
100%
|
Graco Serviços e Importação de Máquinas e Equipamentos em Geral Ltda.
|
Brazil
|
Indirect
|
100%
|
Graco Trading (Shanghai) Co., Ltd.
|
P.R. China
|
Indirect
|
100%
|
Landtec North America, Inc.
|
California, USA
|
Indirect
|
100%
|
Q.E.D. Environmental Systems, Inc.
|
Michigan, USA
|
Direct
|
100%
|
Q.E.D. Environmental Systems Limited
|
England and Wales, UK
|
Indirect
|
100%
|
SAT (Surface Aluminium Technologies) S.r.l.
|
Italy
|
Indirect
|
100%
|
Smith Surface Preparation Systems Inc.
|
Minnesota, USA
|
Direct
|
100%
|
Staffordshire Hydraulic Services Limited
|
England and Wales, UK
|
Indirect
|
100%
|
White Knight Fluid Handling Inc.
|
Minnesota, USA
|
Direct
|
100%
|
|
Date
|
|
|
/s/ WILLIAM J. CARROLL
|
February 14, 2020
|
William J. Carroll
|
|
|
|
/s/ ERIC P. ETCHART
|
February 14, 2020
|
Eric P. Etchart
|
|
|
|
/s/ JACK W. EUGSTER
|
February 14, 2020
|
Jack W. Eugster
|
|
|
|
/s/ JODY H. FERAGEN
|
February 14, 2020
|
Jody H. Feragen
|
|
|
|
/s/ J. KEVIN GILLIGAN
|
February 14, 2020
|
J. Kevin Gilligan
|
|
|
|
/s/ PATRICK J. MCHALE
|
February 14, 2020
|
Patrick J. McHale
|
|
|
|
/s/ LEE R. MITAU
|
February 14, 2020
|
Lee R. Mitau
|
|
|
|
/s/ MARTHA A. MORFITT
|
February 14, 2020
|
Martha A. Morfitt
|
|
|
|
/s/ R. WILLIAM VAN SANT
|
February 14, 2020
|
R. William Van Sant
|
|
|
|
/s/ EMILY C. WHITE
|
February 14, 2020
|
Emily C. White
|
|
1.
|
I have reviewed this annual report on Form 10-K of Graco Inc.;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
|
February 18, 2020
|
|
/s/ PATRICK J. MCHALE
|
|
|
|
|
Patrick J. McHale
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Graco Inc.;
|
2.
|
Based on my knowledge, this 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 report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
|
February 18, 2020
|
|
/s/ MARK W. SHEAHAN
|
|
|
|
|
Mark W. Sheahan
|
|
|
|
|
Chief Financial Officer and Treasurer
|
Date:
|
|
February 18, 2020
|
|
/s/ PATRICK J. MCHALE
|
|
|
|
|
Patrick J. McHale
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
|
February 18, 2020
|
|
/s/ MARK W. SHEAHAN
|
|
|
|
|
Mark W. Sheahan
|
|
|
|
|
Chief Financial Officer and Treasurer
|