<PAGE>

                                                                   EXHIBIT 10.18

                            LESLIE'S POOLMART, INC.

                        1998 INCENTIVE STOCK OPTION PLAN

     1.  PURPOSE.
         -------

     The Plan is intended to provide an opportunity to key employees of the
Corporation and its Subsidiaries to acquire Nonvoting Common Stock of the
Corporation pursuant to Incentive Stock Options and Nonstatutory Stock Options
in order to encourage such persons to remain in the employ of the Corporation.

     2.  DEFINITIONS.  Unless otherwise defined herein or the context otherwise
         -----------
requires, the capitalized terms used herein shall have the following meanings:

          (a) "Administrator" shall mean the Board or the Committee, whichever
               -------------
shall be administering the Plan from time to time in the discretion of the
Board, as described in Section 4 of the Plan.

          (b) "Board" shall mean the Board of Directors of the Corporation.
               -----

          (c) "Change-in-Control" shall have the meaning given to that term in
               -----------------
the Stockholders Agreement.

          (d) "Class I Stockholder" shall have the meaning given to that term in
               -------------------
the Stockholders Agreement.

          (e) "Class II Stockholder" shall have the meaning given to that term
               --------------------
in the Stockholders Agreement.

          (f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
               ----

          (g) "Commission" shall mean the Securities and Exchange Commission.
               ----------

          (h) "Committee" shall mean the committee appointed by the Board in
               ---------
accordance with Section 4 of the Plan.

          (i) "Common Stock" shall mean the $.001 par value Common Stock of the
               ------------
Corporation and any class of shares into which such Common Stock hereafter may
be converted or reclassified.

          (j) "Corporation" shall mean LESLIE'S POOLMART, INC., a Delaware
               -----------
corporation.

          (k) "Disability" shall mean a medically determinable physical or
               ----------
mental impairment which has made an individual incapable of engaging in any
substantial gainful activity.  A condition shall be considered a Disability only
if (i) it can be expected to result in
<PAGE>

death, or has lasted or can be expected to last for a continuous period of not
less than twelve (12) months, and (ii) the Administrator, based upon medical
evidence, has expressly determined that a Disability exists.

          (1) "Employee" shall mean an individual who is employed (within the
               --------
meaning of Section 3401 of the Code and the regulations thereunder) by the
Corporation or a Subsidiary.

          (m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
               ------------
amended.

          (n) "Exercise Price" shall mean the price per Share of Nonvoting
               --------------
Common Stock, determined by the Administrator, at which an Option may be
exercised.

          (o) "Fair Market Value" shall mean the value of one (1) Share of
               -----------------
Nonvoting Common Stock, determined as follows:

              (i) If the Shares are traded on an exchange or over-the-counter
on the Nasdaq National Market (the "NNM") of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), (a) if listed on
an exchange, the closing price as reported for composite transactions on the
business day immediately prior to the date of valuation or, if no sale occurred
on that date, then the mean between the closing bid and asked prices on such
exchange on such date, and (b) if traded on the NNM, the last sale price on the
business day immediately prior to the date of valuation or, if no sale occurred
on such date, then the mean between the highest bid and lowest asked prices as
of the close of business on the business day immediately prior to the date of
valuation, as reported in the NASDAQ system;

              (ii) If the Shares are not traded on an exchange or the NNM but
are otherwise traded over-the-counter, the mean between the highest bid and
lowest asked prices quoted in the NASDAQ system as of the close of business on
the business day immediately prior to the date of valuation or, if on such day
such security is not quoted in the NASDAQ system, the mean between the
representative bid and asked prices on such date in the domestic over-the-
counter market as reported by the National Quotation Bureau, Inc., or any
similar successor organization; and

              (iii)  If neither clause (i) nor (ii) above applies, the fair
market value as determined by the Administrator in good faith. Such
determination shall be conclusive and binding on all persons.

          (p) "Incentive Stock Option" shall mean an option described in Section
               ----------------------
422 of the Code.

          (q) "Nonstatutory Stock Option" shall mean an option granted under the
               -------------------------
Plan that is not an Incentive Stock Option.

                                       2
<PAGE>

          (r) "Nonvoting Common Stock" shall mean the $.00 I par value Nonvoting
               ----------------------
Common Stock of the Corporation, which shall be Nonvoting Common Stock for all
purposes, except to the extent required by law.  The Nonvoting Common Stock is
convertible in certain circumstances into Common Stock as provided in the
Corporation's Certificate of Incorporation, as amended.

          (s) "Option" shall mean any Incentive Stock Option or Nonstatutory
               ------
Stock Option granted pursuant to the Plan.  An Option shall be granted on the
date the Administrator takes the necessary action to approve the grant.
However, if the minutes or appropriate resolutions of the Administrator provide
that an Option is to be granted as of a date in the future, the date of grant
shall be that future date.  Each Option shall vest in accordance with the terms
of the Plan and the applicable Option Agreement.

          (t) "Option Agreement" shall mean a written stock option agreement
               ----------------
evidencing a particular Option.

          (u) "Optionee" shall mean a Participant who has received an Option.
               --------

          (v) "Participant" shall have the meaning assigned to it in Section
               -----------
5(a) hereof.

          (w) "Plan" shall mean this LESLIE'S POOLMART, INC.  1998 Inventive
               ----
Stock Option Plan, as it may be amended from time to time.

          (x) "Purchase Price" shall mean the Exercise Price multiplied by the
               --------------
number of Shares with respect to which an Option is exercised.

          (y) "Retirement" shall mean the voluntary cessation of employment by
               ----------
an Employee upon the attainment of age sixty-five (65) and the completion of not
less than twenty (20) years of service with the Corporation or a Subsidiary.

          (z) "Revolving Line of Credit" shall mean the Corporation's revolving
               ------------------------
line of credit with Wells Fargo Bank (or Wells Fargo Bank and BT Commercial
Corporation), or any revolving line of credit substituted therefor.

          (aa) "Section 16 Participant" shall mean a Participant who is (or, in
                ----------------------
the opinion of the Administrator, may be) generally subject to the Section 16
Requirements with respect to purchases and sales of Common Stock or other equity
securities of the Corporation.

          (bb) "Section 16 Requirements" shall mean those obligations and
                -----------------------
requirements imposed by Sections 16(a) and 16(b) of the Exchange Act and the
rules of the Commission promulgated thereunder.

          (cc) "Securities Act" shall mean the Securities Act of 1933, as
                --------------
amended.

          (dd) "Share" shall mean one share of Nonvoting Common Stock, adjusted
                -----
in accordance with Section 10 of the Plan (if applicable).

                                       3
<PAGE>

          (ee) "Stockholders  Agreement" shall mean that certain Stockholders
                -----------------------
Agreement and Subscription Agreement dated June 11, 1997 among the Corporation,
Green Equity Investors II, L.P., Richard H.  Hillman, Michael J. Fourticq, Brian
P. McDermott, Greg Fourticq, Brian P. McDermott and Manette J. McDermott, the
trustees of the McDermott Family Trust, Occidental Petroleum Corporation and the
other persons contemplated thereby.

          (ff) "Subsidiary" shall mean any subsidiary corporation as defined in
                ----------
Section 424(f) of the Code.

     3.  EFFECTIVE DATE.
         --------------

     The Plan was adopted by the Board effective October 1, 1998, subject to
approval of the Corporation's stockholders pursuant to Section 15 hereof.

     4.  ADMINISTRATION.
         --------------

     The Plan shall be administered, in the discretion of the Board from time to
time, by the Board or by a Committee which shall be appointed by the Board.  The
Board may from time to time remove members from, or add members to, the
Committee.  Vacancies on the Committee, however caused, shall be filled by the
Board.  The Board shall appoint one of the members of the Committee as Chairman.
The Administrator shall hold meetings at such times and places as it may
determine.  Acts of a majority of the Administrator at which a quorum is
present, or acts reduced to or approved in writing by the unanimous consent of
the members of the Administrator, shall be the valid acts of the Administrator.

     The Administrator shall from time to time at its discretion select the
Employees who are to be granted Options, determine the number of Shares to be
subject to Options to be granted to each Optionee and designate such Options as
Incentive Stock Options or Nonstatutory Stock Options.

     A Committee or Board member shall in no event participate in any
determination relating to Options held by or to be granted to such Committee or
Board member.  The interpretation and construction by the Administrator of any
provision of the Plan or of any Option or Option Agreement shall be final.  No
member of the Administrator shall be liable for any action or determination made
in good faith with respect to the Plan or any Option.

     5.  PARTICIPATION.
         -------------

          (a)  Eligibility.
               -----------

          The Optionees shall be such persons (collectively, "Participants";
individually, a "Participant") as the Administrator may select from among the
Employees (who may be officers, whether or not they are directors of the
Corporation); provided however, that the Administrator may at any time or from
time to time designate one or more Employees who are directors as being
ineligible for selection as Participants in the Plan for any period or periods
of time in order to comply with the Section 16 Requirements.

                                       4
<PAGE>

          (b)  Ten-Percent Stockholders.
               ------------------------

          A Participant who owns more than ten percent (10%) of the total
combined voting power of all classes of outstanding stock of the Corporation,
its parent or any of its Subsidiaries, shall not be eligible to receive an
Incentive Stock Option unless (i) the Exercise Price of the Shares subject to
such Option is at least one hundred ten percent (110%) of the Fair Market Value
of such Shares on the date of grant, and (ii) such Option by its terms is not
exercisable after the expiration of five (5) years from the date of grant.

          (c)  Stock Ownership.
               ---------------

          For purposes of Section 5(b) above, in determining stock ownership, a
Participant shall be considered as owning the stock owned, directly or
indirectly, by or for his or her brothers and sisters, spouse, ancestors and
lineal descendants.  Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries.  Stock
with respect to which such Participant holds an Option shall not be counted.

          (d)  Outstanding Stock.
               -----------------

          For purposes of Section 5(b) above, "outstanding stock" shall include
all stock actually issued and outstanding immediately after the grant of the
Option to the Optionee.  "Outstanding stock" shall not include shares authorized
for issue under outstanding Options held by the Optionee or by any other person.

     6.  STOCK AND VESTING.
         ------------------

          (a)  Number of Shares.
               ----------------

          The stock subject to Options granted under the Plan shall be Shares of
the Corporation's authorized but unissued or reacquired Nonvoting Common Stock.
The aggregate number of Shares which may be issued upon exercise of Options
under the Plan shall not exceed 60,000.  The number of Shares subject to Options
outstanding at any time shall not exceed the number of Shares remaining
available for issuance under the Plan.  The limitations established by this
Section 6 shall be subject to adjustment in the manner provided in Section 10
hereof upon the occurrence of an event specified in that Section.

          (b)  Vesting.
               -------

          The 60,000 Shares in the aggregate subject to Options under the Plan
shall vest and become exercisable with respect to each such Option in three
equal annual installments (subject to rounding to the nearest whole Share) on
each of the first, second and third anniversaries of the date of grant, provided
the holder of such Option is then an Employee.

                                       5
<PAGE>

          (c)  Change-in-Control.
               -----------------

          Notwithstanding anything herein to the contrary, including Section
6(b) or 10 hereof, all Options outstanding under the Plan, whether or not then
exercisable, shall vest and become immediately exercisable upon a Change-in-
Control.

     7.  TERMS AND CONDITIONS OF OPTIONS.
         -------------------------------

          (a)  Stock Option Agreements.
               -----------------------

          Each Option shall be evidenced by an Option Agreement, substantially
the form attached hereto as Exhibit A or B, as applicable, or as the
Administrator shall from time to time determine.  Such Option Agreements shall
comply with and be subject to the terms and conditions set forth in this Section
7.

          (b)  Nature of Option.
               ----------------

          Each Option shall state whether it is an Incentive Stock Option or a
Nonstatutory Stock Option.

          (c)  Optionee's Undertaking.
               ----------------------

          Each Optionee shall agree to be bound by the terms of, and shall
become subject to, the Stockholders Agreement.

          (d)  Number of Shares.
               ----------------

          Each Option shall state the number of Shares to which it pertains and
shall provide for the adjustment thereof in accordance with the provisions of
Section 10 hereof.

          (e)  Exercise Price.
               --------------

          Each Option shall state the Exercise Price.  The Exercise Price shall
be the Fair Market Value on the date of grant; provided however, that in the
case of an Incentive Stock Option granted to an Optionee described in Section
5(b) hereof, the Exercise Price shall be one hundred ten percent (110%) of the
Fair Market Value on the date of grant.

          (f) Medium and Time of Payment; Notice.
              ----------------------------------

          The Purchase Price may be paid in full by any of the following means
or any combination thereof, in the discretion of the Optionee:

              (i) in cash or by personal check in United States dollars in the
amount being paid;

                                       6
<PAGE>

              (ii) if the Corporation has completed an underwritten public
offering of the Shares registered under the Securities Act, by the surrender of
Shares, in good form for transfer to the Corporation, registered in the name of
the Optionee or the successor of the Optionee and having a Fair Market Value on
the date of exercise equal to the amount being paid; and

              (iii)  if permitted by the terms of the Corporation's agreements
and securities, by payment of at least fifty percent (50%) of the Purchase Price
of the Shares being purchased in cash or by personal check and/or Shares as in
subsection (ii) above and payment of the balance of the amount being paid by
delivery of a full-recourse promissory note executed by the Optionee or the
successor of the Optionee, which promissory note shall (a) be payable
semiannually as to interest and shall bear interest at the greater of (x) the
prime rate in effect on the date of exercise (as published in the Pacific Coast
Edition of the Wall Street Journal) plus one percent (1%) or (y) the interest
               -------------------
rate on the Corporation's Revolving Line of Credit plus one percent (1%), (b) be
payable as to principal in eight equal semi-annual installments commencing six
months after exercise, and (c) be secured by a security interest in all of the
Shares being purchased upon such Option exercise (which security interest shall
be released ratably concurrently with amortization of principal) pursuant to
which the Corporation may retain possession of certificates evidencing the
Shares subject to such security interest.

          Each Optionee shall acknowledge that the Corporation may be required
to withhold Federal, state and other income taxes as a result of the exercise of
an Option.  Therefore, as a condition to the exercise of an Option, if requested
by the Corporation, the Optionee shall make arrangements satisfactory to the
Corporation to enable it to satisfy such withholding requirements.  Payment of
such withholding amount shall be made, at the discretion of the Optionee, (i) by
cash or personal check, (ii) if the Corporation has completed an underwritten
public offering of the Shares registered under the Securities Act, by delivery
of Shares registered in the name of the Optionee or its successor, or by the
Corporation not issuing such number of Shares subject to the Option, having a
Fair Market Value at the time of exercise equal to the amount to be withheld or
(iii) any combination of (i) and (ii) above.

          The Optionee shall exercise an Option by completing and delivering to
the Corporation, concurrently with the payment of the Purchase Price in the
manner described above, an exercise notice in such form as the Administrator
shall from time to time determine.

          (g) Vesting, Term and Non-Transferability of Options.
              ------------------------------------------------

          Each Option shall state the time or times when all or part thereof
becomes exercisable.  No Option, including Incentive Stock Options, shall be
exercisable after the expiration often (10) years from the date it was granted.
During the lifetime of the Optionee, the Option shall be exercisable only by the
Optionee or the Optionee's guardian or legal representative and shall not be
assignable or transferable, except that an Optionee may transfer a Nonstatutory
Stock Option in whole or in part without consideration, upon written notice to
the Administrator, to a trustee of a revocable inter vivos trust established by
the Optionee for the benefit of the Optionee during his or her lifetime.  In the
event of the Optionee's death, the

                                       7
<PAGE>

Option shall not be transferable by the Optionee other than by will or the laws
of descent and distribution or pursuant to a written beneficiary designation
previously presented to and accepted by the Administrator. Any other attempted
alienation, assignment, pledge, hypothecation, attachment, execution or similar
process, whether voluntary or involuntary, with respect to all or any part of
any Option or right thereunder, shall be void and, at the Corporation's
election, may -cause all of the Optionee's rights under the Option to terminate.

          (h) Cessation of Employment (Except by Death, Disability or
              -------------------------------------------------------
Retirement).
-----------

          If an Optionee ceases to be an Employee for any reason other than his
or her death, Disability or Retirement, such Optionee shall have the right,
subject to the restrictions referred to in Section 7(g) above, to exercise the
Option at any time within three (3) months after cessation of employment, but,
except as otherwise provided in the applicable Option Agreement, only to the
extent that, at the date of cessation of employment, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the applicable Option
Agreement and had not previously been exercised.  An Option Agreement may, in
the sole discretion of the Administrator, but need not, provide that the Option
shall cease to be exercisable on the date of such cessation of employment if
such cessation arises by reason of such Employee's misconduct.  An Employee
shall be considered to have been terminated for misconduct if he or she resigns,
is discharged or otherwise terminated, in any of such cases, on account of
conviction of a felony, misappropriation of the assets of the Corporation or any
Subsidiaries or any affiliate, continued or repeated insobriety or illegal drug
use, continued or repeated absence from service during the usual working hours
of the employee's position for reasons other than Disability or sickness, or
refusal to carry out a reasonable direction of the Board or of the chief
executive officer of the Corporation or of any other person designated by such
chief executive officer.

          For purposes of this Section 7(h), the employment relationship shall
be treated as continuing intact while the Optionee is on military leave, sick
leave or other bona fide leave of absence (to be determined in the sole
discretion of the Administrator). The foregoing notwithstanding, in the case of
an Incentive Stock Option, employment shall not be deemed to continue beyond the
90th day after the Optionee ceased active employment, unless the Optionee's re-
employment rights are guaranteed by statute or by contract.

          (i)  Death of Optionee.
               -----------------

          If an Optionee dies while a Participant, or after ceasing to be a
Participant but during the period in which he or she could have exercised the
Option under this Section 7, and has not fully exercised the Option, then the
Option may be exercised in full, subject to the restrictions referred to in
Section 7(g) above, at any time within twelve (12) months after the Optionee's
death, by the executor or administrator of his or her estate, the Optionee's
designated beneficiary, or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but, except as otherwise
provided in the applicable Option Agreement, only to the extent that, at the
date of death, the Optionee's right to exercise such Option had accrued and had
not been forfeited pursuant to the terms of the applicable Option Agreement and
had not previously been exercised.

                                       8
<PAGE>

          (j)  Disability of Optionee.
               ----------------------

          If an Optionee ceases to be an Employee by reason of Disability, such
Optionee shall have the right, subject to the restrictions referred to in
Section 7(g) above, to exercise the Option at any time within twelve (12) months
after such cessation of employment, but, except as provided in the applicable
Option Agreement, only to the extent that, at the date of such cessation of
employment, the Optionee's right to exercise such Option had accrued pursuant to
the terms of the applicable Option Agreement and had not previously been
exercised.

          (k)  Retirement of Optionee.
               ----------------------

          If an Optionee ceases to be an Employee by reason of Retirement (and
not on account of misconduct as determined in Section 7(h)), such Optionee shall
have the right, subject to the restrictions referred to in Section 7(g) above,
to exercise the Option at any time within three (3) months after cessation of
employment, but only to the extent that, at the date of cessation of employment,
the Optionee's right to exercise such Option had accrued pursuant to the terms
of the applicable Option Agreement and had not previously been exercised.

          (l)  Rights as a Stockholder.
               -----------------------

          No Optionee shall have rights as a stockholder with respect to any
Shares covered by an Option until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as expressly provided in Section 10 hereof. Each
Option Agreement shall state whether such Optionee is or will become a Class I
Stockholder or a Class II Stockholder upon the exercise thereof. The
Stockholders Agreement specifies certain respective rights of Class I
Stockholders and Class II Stockholders.

          (m)  Modification, Extension and Renewal of Options.
               ----------------------------------------------

          Within the limitations of the Plan, the Administrator may modify an
Option, extend or renew outstanding Options or accept the cancellation of
outstanding Options (to the extent not previously exercised) for the granting of
new Options in substitution therefor.  The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.

          (n)  Other Provisions.
               ----------------

          An Option Agreement authorized under the Plan may contain such other
provisions not inconsistent with the terms of the Plan (including, without
limitation, restrictions upon the exercise of the Option) as the Administrator
may, in its discretion, deem advisable.

     8.  LIMITATION OF ANNUAL AWARDS.
         ---------------------------

                                       9
<PAGE>

     The aggregate Fair Market Value (determined as of the date an Option is
granted) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
the Plan and all other plans maintained by the Corporation, its parent or its
Subsidiaries, shall not exceed $100,000.

     9.  TERM OF PLAN.
         ------------

     Options may be granted pursuant to the Plan until the tenth anniversary of
the effective -date referred to in Section 3.

     10.  EFFECT OF CERTAIN EVENTS.
          ------------------------

          (a)  Adjustments.
               -----------

          If the outstanding shares of Nonvoting Common Stock are increased,
decreased or exchanged for or converted into cash, property or a different
number or kind of shares or securities, or if cash, property or shares or
securities are distributed in respect of such outstanding securities, in either
case as a result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, Nonvoting Common Stock dividend or other
distribution, stock split, reverse stock split, spin-off or the like, or if
substantially all of the property and assets of the Corporation are sold, then
the Administrator shall make appropriate and proportionate adjustments in (i)
the number and type of shares or other securities or cash or other property that
may be acquired pursuant to Options therefore granted under this Plan and the
exercise price of such Options, and (ii) the maximum number and type of shares
or other securities that may be issued pursuant to Options thereafter granted
under this Plan provided, however, that notwithstanding the foregoing, such
aggregate number of Shares shall be subject to adjustment under this Section
10(a) only to the extent that such will not affect the status of any Options
intended to qualify as "performance based compensation" under Section 162(m) of
the Code and will not cause Incentive Stock Options to be treated as
Nonstatutory Stock Options.

          (b)  Merger, Sale of Assets, Liquidation.
               -----------------------------------

          If the Corporation shall merge with another corporation and the
Corporation is the surviving corporation in such merger and under the terms of
such merger the shares of Nonvoting Common Stock outstanding immediately prior
to the merger remain outstanding and unchanged, each outstanding Option shall
continue to apply to the Shares subject thereto and shall also pertain and apply
to any additional securities and other property, if any, to which a holder of
the number of Shares subject to the Option would have been entitled as a result
of the merger.  If the Corporation sells or disposes of all or substantially all
of its assets or merges (other than a merger of the type described in the
immediately preceding sentence) or consolidates with or into another corporation
or entity, this Plan and each Option shall terminate upon the effectiveness of
such transaction if, but only if, the Optionee will be entitled to receive and
receives, in exchange for the Shares issued upon the exercise of such Option
prior to such effectiveness, along with all other holders of Nonvoting Common
Stock, (i) cash, (ii) fully marketable securities (subject only, in the case of
an Optionee that is an affiliate of the Corporation, any restriction imposed by
generally accepted accounting principles on the

                                       10
<PAGE>

disposition of capital stock received in such transaction in order that such
transaction may be accounted for as a pooling of interests), or (iii) any
combination of cash and fully marketable securities, in each case for the same
per share consideration and in the same ratio as all other holders of Nonvoting
Common Stock.

          An Option exercised in contemplation of the consummation of the sale
of all substantially all of the assets of the Corporation or a merger (other
than a merger of the type described in the first sentence of the immediately
preceding paragraph) or consolidation of the Corporation with another
corporation, may be conditioned upon such sale, merger or consolidation becoming
effective.

          (c)  Extraordinary Dividends.
               -----------------------

          If the Corporation declares a dividend or makes any other distribution
on its Nonvoting Common Stock, other than a regular periodic cash dividend
payable out of retained earnings, whether such dividend or distribution is
payable in cash or kind, it shall reserve and set aside out of such dividend or
distribution a sufficient sum or amount to pay to each Optionee, upon the
exercise of his or her Option, and upon such exercise such Optionee shall be
entitled to receive in addition to the Shares and other securities to which such
Optionee would be entitled upon such exercise, the same per share amount that
such Optionee would have received had such Optionee exercised such Option in
full prior to the record date for the payment of such dividend or distribution
and been a record holder of all Shares so issuable on such record date and on
the date such dividend or distribution was paid (together with any additional
cash, securities or other property to which such holder would have been entitled
if he or she continued to hold such dividend or distribution from the payment
date until the actual exercise of such Option).

          (d)  Adjustment Determination.
               ------------------------

          To the extent that the foregoing adjustments relate to securities of
the Corporation, such adjustments shall be as determined reasonably and in good
faith by the Administrator, whose determination shall be conclusive and binding
on all persons.

          (e)  Limitation on Rights.
               --------------------

          Except as expressly provided in this Section 10, the Optionee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation, and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or Exercise Price of Shares subject to an Option.  The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of
the Corporation to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.

                                       11
<PAGE>

     11.  SECURITIES LAW REQUIREMENTS.
          ---------------------------

          (a)  Legality of Issuance.
               --------------------

          No Shares shall be issued upon the exercise of any Option unless and
until the Corporation has determined that:

               (i)   it and the Optionee have taken all actions required to
register the offer and sale of the Shares under the Securities Act, or to
perfect an exemption from the registration requirements thereof;

               (ii)  any applicable listing requirement of any stock exchange on
which the Common Stock is listed has been satisfied; and

               (iii) any other applicable provision of state or Federal law has
been satisfied.

          (b)  Restrictions on Transfer; Representations of Optionee; Legends.
               --------------------------------------------------------------

          Regardless of whether the offer and sale of Shares under the Plan has
been registered under the Securities Act or has been registered or qualified
under the securities laws of any state, the Corporation may impose restrictions
upon the sale, pledge or other transfer of such Shares (including the placement
of appropriate legends on stock certificates) if, in the judgment of the
Corporation and its counsel, such restrictions are necessary or desirable in
order to achieve compliance with the provisions of the Securities Act, the
securities laws of any state or any other law. In the event that the sale of
Shares under the Plan is not registered under the Securities Act but an
exemption is available which requires an investment representation or other
representation, each Optionee shall be required to represent that such Shares
are being acquired for investment, and not with a view to the sale or
distribution thereof, and to make such other representations as are deemed
necessary or appropriate by the Corporation and its counsel. Stock certificates
evidencing Shares acquired under the Plan pursuant to an unregistered
transaction shall bear the following restrictive legend and such other
restrictive legends as are required or deemed advisable under the provisions of
any applicable law:

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
     LAWS OF ANY JURISDICTION.  SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR
     OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (i) A
     REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE
     UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW, OR (ii) ANY EXEMPTION
     FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW,
     RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144, PROVIDED AN
     OPINION OF COUNSEL IS FURNISHED TO THE COMPANY, IN FORM AND SUBSTANCE

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<PAGE>

     REASONABLE SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT AN EXEMPTION
     FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND/OR APPLICABLE STATE
     SECURITIES LAW IS AVAILABLE.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
     SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
     TRANSFER COMPLIES WITH THE PROVISIONS OF THE STOCKHOLDERS AGREEMENT DATED
     AS OF JUNE 11, 1997, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
     COMPANY.

     Any good faith and reasonable determination by the Corporation and its
counsel in connection with any of the matters set forth in this Section 11 shall
be conclusive and binding on all persons.

          (c)  Registration or Qualification of Securities.
               -------------------------------------------

          Except as provided in the Stockholders Agreement, the Corporation may,
but shall not be obligated to, register or qualify the sale of Shares under the
Securities Act or any other applicable law.

          (d)  Exchange of Certificates.
               ------------------------

          If, in the opinion of the Corporation and its counsel, any legend
placed on a stock certificate representing Shares sold under the Plan is no
longer required, the holder of such certificate shall be entitled to exchange
such certificate for a certificate representing the same number of Shares but
without such legend.

     12.  AMENDMENT OF THE PLAN.
          ---------------------

     The Board may from time to time, with respect to any Shares at the time not
subject to Options, suspend or discontinue the Plan or revise or amend it in any
respect whatsoever except that, without the approval of the Corporation's
stockholders, no such revision or amendment shall:

          (a)  Except as provided in Section 10(a), increase the number of
Shares which may be issued under the Plan;

          (b)  Change the designation in Section 5 with respect to the class of
persons eligible to receive Options; or

          (c)  Amend this Section 12 to defeat its purpose.

                                       13
<PAGE>

     13.  AUTOMATIC CONVERSION.
          --------------------

     To the extent that the outstanding shares of Nonvoting Common Stock are
automatically converted into Common Stock pursuant to the Corporation's
Certificate of Incorporation, as amended, then the Shares issuable pursuant to
the Plan, including without limitation, Shares which are then subject to
outstanding Options, shall be Common Stock instead of Nonvoting Common Stock,
without any further action on the part of the Administrator.

     14.  EXCHANGE ACT.
          ------------

     If the Common Stock is registered under the Exchange Act, the Plan shall be
amended by the Administrator from time to time to the extent necessary or
advisable, in the judgment of the Administrator after having consulted with
Corporation's counsel, to enable Section 16 Participants to obtain the benefits
of such exclusions or exemptions from the Sections 16 Requirements as may be
established by the Commission from time to time by rule, regulation,
administrative order or interpretation (whether such interpretation is made by
the Commission or staff) with respect to (i) the receipt of Options, (ii) the
exercise, modification, extension, cancellation, exchange, termination or
expiration of Options, (iii) the purchase of Common Stock upon the exercise of
Options, (iv) the sale of Common Stock received upon the exercise of Options,
and (v) the administration of this Plan.  Anything in the Plan to the contrary
notwithstanding, such amendments may be made without approval of the
Corporation's stockholders unless and to the extent that, in the judgment of the
Administrator after consulting with the Corporation's counsel, stockholder
approval of such an amendment is a prerequisite to effectuating a desired
exclusion or exemption from the Section 16 Requirements.

     15.  APPLICATION OF FUNDS.
          --------------------

     The proceeds received by the Corporation from the sale of Common Stock
pursuant to the exercise of an Option will be used for general corporate
purposes.

     16.  APPROVAL OF STOCKHOLDERS.
          ------------------------

     The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of the Corporation's outstanding shares of capital stock
no later than September 30, 1999.  Prior to such approval, Options may be
granted but shall not be exercisable.  Any amendment described in Section 12
shall also be subject to approval by the Corporation's stockholders.

                                       14
<PAGE>

     17.  EXECUTION.
          ---------

     To record the adoption of the Plan by the Board as of October 8, 1998, the
Corporation has caused an authorized officer to affix the corporate name hereto.


                                         LESLIE'S POOLMART, INC.


                                         By:__________________________________
                                            Michael J. Fourticq
                                            Chairman

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