Document:

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                                                                   EXHIBIT 10.19

                              CONSULTING AGREEMENT

     This Consulting Agreement ("Agreement") is entered into as of December 31,
1999 by Brian P. McDermott ("Executive") and Leslie's Poolmart, Inc. (the
"Company").  It is entered into to resolve amicably all matters between
Executive and Company, including, without limitation, all matters concerning
Executive's employment and the termination of his employment as a result of his
resignation.

     1.  Resignation of Employment.  Executive resigns his employment with the
         -------------------------
Company, and resigns as an officer in all capacities of the Company, and the
Company accepts his resignation effective December 31, 1999.  Executive
understands that his resignation is final and that the Company is relying on the
resignation in employment and business planning.  The Company and Executive
acknowledge that Executive is not resigning from the Company's Board of
Directors, and will be nominated to serve as the Chairman of the Board.  For so
long as and if Executive remains Chairman of the Board after October 1, 2001 (or
commencing immediately after the payments described in Paragraph 4 cease, if
such cessation occurs prior to October 1, 2001), Executive shall be compensated
at the rate of $125,000.00 per annum, payable monthly, for his services as
Chairman of the Board.  Nothing in this Agreement, including, without
limitation, Paragraphs 4, 5, 13 and 14, shall limit Executive's responsibilities
and fiduciary obligations as a member of the Board of Directors.

     2.  Final Wages and Vacation Pay.  Executive hereby acknowledges that he
         ----------------------------
has received all earned wages and vacation pay accrued through and including
Executive's last day of employment.  Additionally, the Company agrees to
reimburse Executive for reasonable business expenses incurred prior to the
resignation date in accordance with the Company's reimbursement policy.
Executive is entitled to these sums upon termination of employment, whether or
not Executive enters into this Agreement.

     3.  Health Continuation Coverage and Other Benefits.  The Company
         -----------------------------------------------
acknowledges that Executive is eligible to elect continuation of medical and
dental insurance coverage under the Consolidated Omnibus Budget Reconciliation
Act, as amended ("COBRA"), in accordance with its terms.  With regard to all
other benefit plans, Executive's rights and responsibilities are as provided by
applicable law and plan provisions and administration.

     For a period of 12 months following the date of resignation, the Company
shall pay the cost of COBRA coverage, provided that Executive remains eligible
                                      --------
for such coverage.  However, if Executive becomes covered under another plan,
the Company's obligations to pay COBRA will cease.  If no other coverage is
obtained by the time the 12-month period ends, Executive must pay the full cost
of such coverage should Executive wish to keep the coverage in place for any
remaining period of eligibility.

     4.  Separation Pay.
         --------------

          (a) In consideration of the covenants and releases herein, the Company
agrees to pay Executive an amount equal to his annual base salary (i.e., the sum
of $428,500.00), less
<PAGE>

payroll tax withholdings, as described in this Paragraph. Initially, for a
period of six (6) months ending on June 30, 2000, Executive shall receive
payments on an installment basis in the same amount and at the same time as
payroll checks would have been distributed to Executive had he remained an
employee. Thereafter, Executive will receive the remaining $214,250.00 in
fifteen (15) equal installments of $14,283.33 each, less payroll tax
withholding, payable on the last day of the month, commencing July 31, 2000 and
terminating on September 30, 2001. These payments will be made whether or not
Executive obtains another job during the time period in question.

          (b) During the period of time that Executive is receiving separation
payments, Executive agrees to make himself available at reasonable times upon
reasonable notice to consult with the Company.  This Agreement to consult will
not result in an employment relationship.

          (c) Separation payments will cease and the Company will not be
obligated to make any further payments in the event of either of the following:

               (1) Executive commences employment for a competitor of the
     Company; or

               (2) Executive engages in any conduct prohibited by Paragraph 14
     entitled "Proprietary Information and Non-Solicitation."

A business will be deemed a competitor under this Agreement if a major portion
of its business is the sale of swimming pool supplies and products which are
sold by the Company.  Competitors include, but are not limited to, Paddock
Pools, Pinch-A-Penny, In the Swim, South Central Pools and Hughes.

          (d) In the event the Company intends to exercise the right to cease
making the separation payments called for under Paragraph 4(a), Executive will
be given written notice by the Company that it is ceasing payments pursuant to
this Paragraph 4.  Thereafter, if Executive disputes the Company's right to
cease making payments, he shall notify the Company in writing and may demand
that the issue of "competition" and/or breach of Paragraph 14 submitted to
mediation pursuant to Paragraph 18 of this Agreement.

          (e) In light of Executive's right of revocation in Paragraph 24, no
payments will be made under the Agreement until the eighth day following the
execution and delivery of this Agreement (or the next business day, if the
          ---
eighth day is a weekend day or a holiday).

     5.  Stock Options.
         -------------

          (a) The Company acknowledges that Executive's stock options, if any,
under the Company's 1997 Nonstatutory Stock Option Plan are fully vested and may
be exercised by him at any time prior to the expiration of such options.  As to
Executive's options under the Company's 1997 Incentive Stock Option Plan, the
Company and Executive agree that as to Executive's 57,000 "tenure" stock
options, and notwithstanding the terms of the options, Executive is fully vested
and such options will remain outstanding, exercisable and otherwise unaffected
by Executive's separation.  Executive and the Company further agree that
Executive is fully vested in 13,333.2 of the 20,000 "performance" stock options
previously granted to him and

                                       2
<PAGE>

may exercise said options anytime until the options expire. The parties further
acknowledge that no further vesting of said options will occur in the future.
Executive acknowledges that such extension of the exercise period may result in
the options not being "incentive stock options" within the meaning of the
Internal Revenue Code of 1986, as amended.

          (b) Notwithstanding anything to the contrary in Paragraph 5(a), in the
event of either of the following:

               (1) Executive commences employment for a competitor of the
     Company as defined in Paragraph 4(c); or

               (2) Executive engages in any conduct prohibited by Paragraph 14
     entitled "Proprietary Information and Non-Solicitation;"

the Company may revoke the extension of time to exercise the Incentive Stock
Options by giving written notice to Executive of the revocation.  The revocation
of the right to exercise the Incentive Stock Options shall be effective 90 days
from the effective date of the written notice.

          (c) The written notice referenced in this Paragraph 5 and any other
notice required or permitted to be given under this Agreement, shall be deemed
effective (1) on the date personally delivered to the individuals at the
addresses set forth below; or (2) if sent by overnight delivery, on the day
following the deposit with an overnight mail service addressed to the
individuals at the addresses set forth below; or (3) if sent by certified mail,
return receipt requested, on the third business day following mailing or the
date of actual receipt, whichever is earlier.

          If to Executive, the Notice shall be addressed as follows:

               Brian P. McDermott
               218 Anderson Street
               Manhattan Beach, CA  90266

          and to

               Barry B. Kaufman
               Law Offices of Barry B. Kaufman
               16133 Ventura Boulevard, Suite 700
               Encino, CA  91436

          If to the Company, the Notice shall be addressed as follows:

               Lawrence Hayward
               President and CEO
               Leslie's Poolmart, Inc.
               20630 Plummer Street
               Chatsworth, CA  91311

                                       3
<PAGE>

Any changes in the above addresses must be communicated in writing to the other
party to this Agreement in accordance with this Paragraph 5(c).

     6.  Acknowledgment of Consideration.  Executive acknowledges that Executive
         -------------------------------
has no entitlement to separation pay as provided in Paragraph 4, no entitlement
to any payment toward COBRA health insurance coverage as specified in Paragraph
3 and no entitlement to the agreement extending the period for the exercise of
his incentive stock options as specified in Paragraph 5, except in return for
entering into this Agreement.

     7.  Sole Entitlement.  Executive acknowledges and agrees that no other
         ----------------
monies or benefits are owing to Executive except as set forth above.
Executive's entitlements under any and all group insurance and benefit plans are
as provided by plan provisions and applicable law.

     8.  Return of Property and Documents.  Executive states that Executive has
         --------------------------------
returned or will immediately return to the Company all property and documents of
the Company which were or are in Executive's possession in his capacity as an
employee or officer.

     9.  Release of the Company.  Executive (for himself, his agents, heirs,
         ----------------------
successors, assigns, executors and/or administrators) does hereby and forever
release and discharge the Company and its past and present parent, subsidiary,
sister and affiliated corporations, divisions or other related entities,
including, without limitation, Green Equity Investors II, L.P., Leonard Green &
Partners, L.P., and the respective partners, employees, agents and affiliates
thereof, employee benefit plans and fiduciaries of the foregoing, as well as the
successors, shareholders, partners, officers, directors, heirs, predecessors,
assigns, agents, employees, attorneys and representatives of each of them, past
or present, from any and all causes of actions, actions, judgments, liens,
debts, contracts, indebtedness, damages, losses, claims, liabilities, rights,
interests and demands of whatsoever kind or character, known or unknown,
suspected to exist or not suspected to exist, anticipated or not anticipated,
whether or not heretofore brought before any state or federal court or before
any state or federal agency or other governmental entity, which Executive has or
may have against any released person or entity by reason of any and all acts,
omissions, events or facts occurring or existing prior to the date hereof,
including, without limitation, all claims attributable to the employment of
Executive, all claims attributable to the termination of that employment, and
all claims arising under any federal, state or other governmental statute,
regulation or ordinance or common law, such as, for example and without
limitation, Title VII of the Civil Rights Act of 1964 which prohibits
discrimination and harassment on the basis of sex, race, color, national origin
and religion, the Civil Rights Act of 1866, the Age Discrimination in Employment
Act which prohibits discrimination on the basis of age over 40, the California
Fair Employment Act which prohibits discrimination on the basis of race,
religion, creed, color, national origin, ancestry, disability, medical
condition, age over 40 and sex, the California Labor Code, and wrongful
termination claims, excepting only those obligations expressly recited to be
performed hereunder.

     10.  Limited Release of McDermott.
          ----------------------------

          (a) Excepting only those obligations expressly recited to be performed
hereunder and as provided below in Paragraph 10(b), the Company hereby releases
and discharges Executive from and with respect to any and all claims,
agreements, obligations,

                                       4
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losses, damages, injuries, demands and causes of action, known or unknown,
suspected or unsuspected, arising out of or in any way connected with
Executive's employment relationship with or separation from the Company, or any
other occurrences, actions, omissions or claims whatever, known or unknown,
suspected or unsuspected, which the Company now owns or holds or has at any time
heretofore owned or held as against Executive.

          (b) Anything contained in this Agreement to the contrary
notwithstanding, the Company is not releasing any claims of the following nature
which it may have against Executive:  claims for intentional wrongdoing,
including, without limitation, for conversion, breach of fiduciary duty and
fraud, for gross misconduct, intentional or not, and for damage arising out of
violation of any criminal law.

     11.  Waiver of Unknown Claims.  Except for those obligations created by or
          ------------------------
arising out of this Agreement and except as limited in this Agreement, it is the
intention of Executive and the Company in executing this Agreement that the same
shall be effective as a bar to each and every claim, demand and cause of action
hereinabove specified.  In furtherance of this intention, the parties hereby
expressly waive any and all rights and benefits conferred upon them by the
provisions of Section 1542 of the California Civil Code and expressly consent
that this Agreement shall be given full force and effect according to each and
all of its express terms and provisions, including those related to unknown and
unsuspected claims, demands and causes of action, if any, as well as those
relating to any other claims, demands and causes of action hereinabove
specified.  Section 1542 provides:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOWN OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
          THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT WITH THE DEBTOR.

Executive and the Company each acknowledge that each may hereafter discover
claims or facts in addition to or different from those which each now knows or
believes to exist with respect to the subject matter of this Agreement and
which, if known or suspected at the time of executing this Agreement, may have
materially affected this settlement.  Each hereby waives any right, claim or
cause of action that might arise as a result of such different or additional
claims or facts.  Executive and the Company each acknowledge that each
understands the significance and consequence of such release and such specific
waiver of Section 1542, which have been explained to them by their respective
counsel.

     12.  Confidentiality.  Executive agrees to hold confidential and not to
          ---------------
make public or to communicate orally or in writing to any person or entity,
except his wife, attorneys, accountants and personal advisors, directly or
indirectly, the contents of this Agreement, the amount of payments under this
Agreement, nor the existence or contents of the discussions leading to this
Agreement, except only as may be lawfully compelled, as necessary to enforce the
terms of this Agreement, or as reasonably necessary to obtain confidential tax,
financial or legal advice.

                                       5
<PAGE>

     13.  Non-Disparagement.  Executive covenants and agrees that he will in no
          -----------------
way disparage the Company or its services, executives, agents or business
reputation to any person or entity (whether or not said person or entity is a
current or prospective supplier, customer or executive of the Company).
Executive further covenants and agrees that he will not otherwise engage in
conduct which is not in good faith which disrupts, damages, impairs or
interferes with the business, reputation of employees of the Company.  The
officers and directors of the Company agree not to make or publish, either
orally or in writing, any disparaging statement concerning Executive, including
his termination by the Company, his services with the Company and matters
relating to his employment.

     14.  Proprietary Information and Non-Solicitation.  As an executive officer
          --------------------------------------------
of the Company, Executive has occupied a position of trust with respect to
business information of a secret or confidential nature.  Executive agrees not
to misappropriate, disclose or make available to anyone outside of the Company's
organization at any time any confidential information or trade secret,
including, without limitation, all of the following materials and information
(whether or not reduced to writing and whether or not patentable or protected by
copyright):  trade secrets, inventions, processes, formulae, programs, technical
data, financial information, identities or lists of customers, prospects,
suppliers or vendors, and any other confidential or proprietary information
relating to the Company (collectively, "Proprietary Information") without the
prior written consent of the Company, except as may be required by law.  The
Company's consent may be withheld for any reason or no reason at all.  When
Proprietary Information becomes generally available to the public other than by
Executive's acts or omissions, it is no longer subject to the restrictions of
this Paragraph.  However, Proprietary Information shall not be deemed to come
under this exception merely because it is embraced by more general information
which is or becomes generally available to the public.  The undertakings set
forth in this Paragraph shall survive the termination of this Agreement or other
arrangements contained in this Agreement.

     Further, Executive agrees that for the 21-month period commencing January
1, 2000, he will not, directly or indirectly, either on his own behalf or on
behalf of any other person or entity, attempt to persuade or solicit any
customer of the Company to cease to do business or to reduce the amount of
business which any customer of the Company has customarily done or contemplates
doing with the Company or to do business with another company which is a
competitor of the Company.  For the same 21-month period commencing January 1,
2000, Executive further agrees he will not, directly or indirectly, either on
his own behalf or on behalf of any other person or entity, attempt to persuade
or solicit any person who is an employee of the Company to terminate such
employment.  For a period of 12 months commencing January 1, 2000, Executive
will not participate in any way in the hiring of any executive, officer,
regional manager, district manager or equivalent employee of the Company by
Executive's then-employer and, if contacted by such person, will discourage and
will not assist him/her in becoming employed by Executive's then-employer.  It
shall not violate the non-solicitation provisions of this Paragraph if
Executive's then-employer should hire an employee of the Company, if Executive
has not participated in any way in the hiring process.

     15.  Arbitration.  Executive and the Company agree that any and all
          -----------
disputes, controversies or claims arising out of or concerning this Agreement or
concerning any matter resolved and settled by this Agreement shall be determined
exclusively through a final and

                                       6
<PAGE>

binding arbitration to be held in Los Angeles, California, administered and
conducted pursuant to the National Rules for Resolution of Employment Disputes
of the American Arbitration Association. The claims subject to arbitration
include, without limitation, all matters concerning, relating to or arising out
of Executive's employment or its termination. Judgment upon the award of the
arbitrator may be rendered in any court of competent jurisdiction. The
arbitrator shall be a former jurist or an attorney with substantial experience
in employment matters. This agreement to arbitrate does not include claims for
unemployment insurance and workers' compensation. The arbitrator's authority and
jurisdiction shall be limited to determining the dispute in arbitration in
conformity with law to the same extent as if such dispute were determined as to
liability and remedy by a court without a jury. The arbitrator shall render an
award which shall include a written statement of opinion setting forth the
arbitrator's findings of fact and conclusions of law. EXECUTIVE AND THE COMPANY
EXPRESSLY WAIVE ALL RIGHTS TO A JURY TRIAL IN COURT ON ALL STATUTORY OR OTHER
CLAIMS.

     16.  Non-Waiver of Vested Benefits.  Nothing herein is intended to alter
          -----------------------------
Executive's entitlement to his vested benefits under the Company's 401(k) Plan.
The Company reserves the right to change or modify its benefit plans at any time
and agrees that any such changes will be applied to Executive in a
nondiscriminatory manner.

     17.  Indemnification re: Third Party Claims.  Executive shall be entitled
          --------------------------------------
to indemnification and defense of actions brought by third parties in accordance
with the Company's policy and existing law to the same extent as other
terminated executives and other Board members.

     18.  Mediation Precondition to Formal Assertion of Claims.  The parties
          ----------------------------------------------------
hereto, and each of them, agree that, in the event a dispute arises out of or
concerning this Agreement, he/it will not commence any demand for arbitration
without first submitting the dispute to mediation in accordance with the
mediation rules of JAMS/Enddispute, LLC.  The parties shall share equally the
costs of the mediation proceeding.  Said proceeding shall be held in Los
Angeles, California.  The mediator shall be mutually selected by the parties or
their attorneys or, if no agreement can be reached on the mediator, the mediator
will be selected by JAMS/Enddispute.  The parties agree that their dispute shall
be mediated no later than forty-five (45) days after a demand for mediation is
made.

     19.  No Admissions.  Nothing in this Agreement is nor shall be construed as
          -------------
being an admission of wrongdoing or liability by either Executive or the
Company.

     20.  Costs and Attorneys' Fees.  It is agreed that the Company and
          -------------------------
Executive will bear its and his own costs and attorneys' fees, if any, which may
have been incurred with respect to any matter released in this Agreement.

     21.  Construction and Partial Invalidity.  The Company and Executive agree
          -----------------------------------
that:

          (a) The language of this Agreement shall, for any and all purposes, be
construed as a whole, according to its fair meaning, not strictly for or against
Executive or the Company, and without regard to the identity or status of any
person or persons who drafted all or

                                       7
<PAGE>

any part of this Agreement. The parties intend that this Agreement be construed
in favor of arbitration as the final and binding means for resolving any
disputes between them.

          (b) If any provision of this Agreement is declared invalid by any
court or competent jurisdiction or rendered invalid by any other process of
federal or state law, the remaining provisions of this Agreement shall remain in
full force and effect.

     22.  Entire Agreement.  This Agreement constitutes a single integrated
          ----------------
contract expressing the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and
written agreements and discussions with respect to the subject matter hereof.
There are no other agreements, written or oral, express or implied, between the
parties hereto, concerning the subject matter hereof, except as set forth
herein.  This Agreement may be amended or modified only by written agreement of
the parties.

     23.  Choice of Law.  This Agreement shall be interpreted in accordance with
          -------------
the laws of the State of California.

     24.  Waiting Period and Right of Revocation.  EXECUTIVE ACKNOWLEDGES (SAYS)
          --------------------------------------
THAT HE IS AWARE THAT AND IS HEREBY ADVISED THAT HE HAS THE RIGHT TO CONSIDER
THIS AGREEMENT FOR TWENTY-ONE (21) DAYS BEFORE SIGNING IT AND THAT IF HE SIGNS
THIS AGREEMENT PRIOR TO THE EXPIRATION OF TWENTY-ONE (21) DAYS, HE IS WAIVING
(GIVING UP) THIS RIGHT FREELY AND VOLUNTARILY.  EXECUTIVE ALSO ACKNOWLEDGES
(SAYS) THAT HE IS AWARE OF AND IS HEREBY ADVISED THAT HE HAS THE RIGHT TO REVOKE
(CANCEL) THE PORTION OF THIS AGREEMENT RELEASING AGE DISCRIMINATION CLAIMS UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT FOR A PERIOD OF SEVEN (7) DAYS
FOLLOWING THE SIGNING OF THIS AGREEMENT AND THAT IT SHALL NOT BECOME EFFECTIVE
OR ENFORCEABLE UNTIL THE REVOCATION (CANCELLATION) PERIOD HAS EXPIRED.  TO
REVOKE (CANCEL) THIS AGREEMENT, EXECUTIVE MUST NOTIFY THE COMPANY WITHIN SEVEN
(7) DAYS OF SIGNING IT.  SHOULD EXECUTIVE REVOKE, THE COMPANY SHALL HAVE THE
RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE OR NOT TERMINATE THE REMAINDER OF
THE AGREEMENT.

     25.  Attorney Advice.  EXECUTIVE ACKNOWLEDGES (SAYS) THAT HE IS AWARE OF
          ---------------
HIS RIGHT TO CONSULT AN ATTORNEY AND THAT HE IS ADVISED TO CONSULT WITH AN
ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.

     26.  Understanding of Agreement.  Executive states that Executive has
          --------------------------
carefully read this Agreement, that Executive fully understands its final and
binding effect, that the only promises made to Executive to sign this Agreement
are those stated above, and that Executive is signing this Agreement
voluntarily.

                                       8
<PAGE>

     27.  Counterparts/Facsimile Execution.  This Agreement may be executed in
          --------------------------------
counterparts, and each counterpart, when executed, shall have the efficacy of a
signed original.  Execution and delivery of this Agreement by facsimile shall be
deemed to be equivalent to the execution and delivery of an original.

                              EXECUTIVE:

                              /s/ BRIAN P. MCDERMOTT
                              ----------------------
                              Brian P. McDermott

                              LESLIE'S POOLMART, INC.

                              By:   /s/ MICHAEL FOURTIQ
                                    ------------------------------
                                    Michael Fourtiq
                                    Chairman of the Board

                                       9<PAGE>

                                                                   EXHIBIT 10.20

                              EMPLOYMENT AGREEMENT

                            Leslie's Poolmart, Inc.
                              Lawrence H. Hayward

     This Employment Agreement ("Agreement") is made as of January 1, 2000 by
and between LESLIE'S POOLMART, INC., a Delaware corporation ("LPM"), and
LAWRENCE H. HAYWARD ("Mr. Hayward").

                                    Recitals
                                    --------

     A.  LPM is a corporation organized under the laws of Delaware.  It is
engaged in the business of marketing pool supplies and related pool equipment
and products.

     B.  LPM desires to employ Mr. Hayward as President and Chief Executive
Officer of LPM to manage the business and affairs of LPM.  Mr. Hayward desires
to be so employed and act in such capacities.

     Accordingly, the parties agree as follows:

1.  Employment.  LPM will employ Mr. Hayward, and Mr. Hayward will be employed
    ----------
by LPM, as the President and Chief Executive Officer of LPM and will be
nominated as a member of its Board of Directors.  Mr. Hayward shall assume these
positions on January 1, 2000.  Mr. Hayward shall serve at the will of the Board
of Directors.  Mr. Hayward shall be accorded the authority by the Board of
Directors commensurate with his position as Chief Executive Officer of LPM, and
he shall make a good faith effort to act in the best interests of LPM and
perform those duties reasonably assigned to him by the Board of Directors.  Mr.
Hayward will devote himself full-time to the interests of LPM and shall not
accept other employment except with the consent of the Board of Directors of
LPM.

2.  Location of Employment.  Mr. Hayward's principal place of employment shall
    ----------------------
be at the executive offices of LPM or at such other location as mutually agreed
upon by the parties.

3.  Compensation.
    ------------

    a.  Salary.  LPM shall pay Mr. Hayward a salary at the annual rate of
        ------
$400,000.00, less normal withholdings, for each calendar year, prorated for any
portion thereof, payable in substantially equal installments in accordance with
LPM's usual payroll practice, but in no event less frequently than monthly.

    b.  Bonus.  Mr. Hayward shall participate in the Bonus Plan for the most
        -----
senior executives of LPM. Mr. Hayward shall be eligible for an annual bonus of
$150,000.00, depending upon the financial performance of LPM. Notwithstanding
the foregoing, Mr. Hayward shall be guaranteed a bonus for fiscal year 2000 of
not less than $150,000.00 irrespective of the financial performance of LPM
during that year or the termination of his employment during that year.

    c.  Stock Options.  Effective this date, LPM hereby grants Mr. Hayward an
        -------------
irrevocable option to purchase up to 50,000 shares of LPM non-voting common
stock at the
<PAGE>

purchase price of $20.00 per share. This option shall vest immediately. A more
detailed option agreement shall be separately executed by the parties hereto.

    d.  Other Benefits.  Mr. Hayward shall receive other benefits such as four
        --------------
(4) weeks of vacation each year, personal and sick leave, insurance and other
benefits consistent with the then-current policies of LPM and equal to those
benefits extended to the most senior executives of LPM. Mr. Hayward will be
provided with office facilities, secretarial support, and business expense
reimbursement consistent with the policies of LPM with respect to its most
senior executives.

    e.  Severance.  If Mr. Hayward's employment is terminated by LPM for any
        ---------
reason other than Just Cause, LPM shall continue to pay him an amount equal to
his then-current salary, less normal withholdings, at intervals equal to the
salary payments being received by the other most senior executives of LPM and
continue to provide Mr. Hayward with the benefits he received prior to
termination. Such payments and benefits shall continue through December 31, 2001
or the twelve-month period following termination, whichever is longer; provided,
however, that if Mr. Hayward becomes an employee, consultant, or partner of a
company or business entity, that directly competes with LPM, any severance
payments and benefits will end as of the date such relationship between Mr.
Hayward and the competing entity effectively commences. For the purpose of this
section, a termination for "Just Cause" shall mean a termination of employment
for any of the following reasons: (i) Mr. Hayward's conviction of a felony,
without the right of further appeal, which has an adverse impact on the Company
or which involves the material misappropriation of LPM's assets; (ii) an
intentional or grossly negligent violation by Mr. Hayward of any reasonable
policy of the Board of Directors of LPM that results in material damage to the
Company and which, after notice to do so, Mr. Hayward fails to correct within a
reasonable time; or (iii) the performance of services by Mr. Hayward for any
other company, entity, or person which directly competes with LPM during the
time Mr. Hayward is employed by LPM, without the written approval of the Board
of Directors of LPM. In the event Mr. Hayward is required by LPM to relocate
from his existing home, such requirement shall at Mr. Hayward's sole
determination be deemed a termination of his employment under this Section 3(e),
and Mr. Hayward shall be entitled to all of the severance set forth herein.
Further, in the event LPM or substantially all of its business or assets is
sold, consolidated, merged or there is a change in the control in the ownership
of LPM, such sale, consolidation, merger or change in control shall, at Mr.
Hayward's sole determination, be deemed a termination of his employment under
this Section 3(e), and Mr. Hayward shall be entitled to all of the severance set
forth herein.

4.  Reimbursement for Expenses.  During the term of this Agreement, in addition
    --------------------------
to the reimbursement of those business expenses set forth in 3(d) above, LPM
shall reimburse Mr. Hayward for his travel, housing and living expenses as long
as Mr. Hayward is required to travel more than twenty-five (25) miles from his
home to his principal place of employment.

5.  Representation of Mr. Hayward.  Mr. Hayward represents and warrants that
    -----------------------------
execution or delivery of this Agreement, or his performance hereunder will
conflict with, or result in a breach of, any obligation, contract, agreement,
covenant or instrument to which he is a party.

6.  Dispute Resolution.  This Agreement shall be governed and construed in
    ------------------
accordance with the laws of the state of Mr. Hayward's principal place of
employment.  Mr. Hayward and LPM agree that any and all disputes, controversies
or claims of any nature between them including,
<PAGE>

without limitation, any disputes arising out of or concerning this Agreement,
Mr. Hayward's employment or his termination shall be determined exclusively by
final and binding arbitration before a single arbitrator located in the same
county as Mr. Hayward's principal place of employment, administered by the
American Arbitration Association ("AAA") under the National Rules For Resolution
Of Employment Disputes of the AAA, and that judgment upon the award of the
arbitrator may be rendered in any court of competent jurisdiction. This includes
any claims Mr. Hayward may have against LPM or against LPM's officers,
directors, employees or agents in their capacity as such or otherwise. The
arbitrator shall be a former jurist or an attorney with substantial experience
in employment matters and mutually agreed to by the parties in their reasonable
discretion. This agreement to arbitrate does not include claims covered by
unemployment insurance and workers' compensation statutes.

The arbitrator's authority and jurisdiction shall be limited to determining the
dispute in arbitration in conformity with law to the same extent as if such
dispute were determined as to liability and remedy by a court without a jury.
The arbitrator shall render an award which shall include a written statement of
opinion setting forth the arbitrator's findings of fact and conclusions of law.
MR. HAYWARD AND LPM EXPRESSLY WAIVE ALL RIGHTS TO A JURY TRIAL IN COURT ON ALL
STATUTORY OR OTHER CLAIMS.

7.  Entire Agreement/Modifications.  This Agreement constitutes the entire
    ------------------------------
agreement of the parties with respect to Mr. Hayward's employment with LPM.  It
supersedes any prior agreement, statement or representation.  It may be modified
only by written instrument executed by the party against which the modification
is asserted.  Failure to require performance of any provision shall not affect
the right at a later time to enforce the same.  No waiver by either party of a
breach, whether by conduct or otherwise, shall be construed as a further or
continuing waiver of any such breach.

8.  Severability.  Any provision of this Agreement that is prohibited or
    ------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

9.  Survivability.  The rights and obligations of the parties to this Agreement
    -------------
under Sections 3.b., 3.e., 6, 7, 8 and 11 shall survive the termination of this
Agreement.

10.  Assignability.
     -------------

     a.  Subject to the provisions of Section 3(e) above, in the event LPM shall
merge or consolidate with any other partnership, limited liability company,
corporation, or business entity or all or substantially all LPM's business or
assets shall be transferred in any manner to any other partnership, limited
liability company, corporation or business entity, such successor shall
thereupon succeed to, and be subject to, all rights, interests, duties,
obligations of, and shall thereafter be deemed for all purposes hereof to be,
LPM hereunder.

     b.  This Agreement is personal in nature and none of the parties hereto
shall, without the written consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except by operation of law or
pursuant to the terms of Section 10(a) above.
<PAGE>

     c.  Nothing expressed or implied herein is intended or shall be construed
to confer upon or give to any person, other than the parties hereto, any right,
remedy or claim under or by reason of this Agreement or of any term, covenant or
condition hereof.

11.  Confidentiality and Non-Solicitation.  The parties recognize that Mr.
     ------------------------------------
Hayward will have access to trade secrets and proprietary information of LPM,
and they recognize that should such information be revealed to a competitor, LPM
would be materially damaged in an amount difficult to calculate.  During the
term of this Agreement and thereafter, Mr. Hayward promises not to disclose or
use or induce or assist in the disclosure or use any of the above information
except for the benefit of LPM.  Accordingly, Mr. Hayward agrees that for one (1)
year after termination of his employment with LPM, regardless of the reason for
such termination, he shall not, directly or indirectly, on his behalf or the
behalf of any other person or entity, solicit any customers of LPM to cease to
do business or to reduce the amount of business with LPM or to do business with
another company that is a competitor of LPM or solicit any person who is an
employee of LPM to terminate such employment.

The parties hereto have executed this Agreement as of this 31st day of December,
1999.

LESLIE'S POOLMART, INC.                    LAWRENCE H. HAYWARD

By:       Brian P. McDermott                     /s/ Lawrence H. Hayward
     -----------------------------         -----------------------------------
Its:      Chairman of the Board
     -----------------------------

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