##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2002.

Commission file number 0-18756

WESTERN WATER COMPANY

(Exact name of registrant as specified in its charter)


|                                         |                                     
|---------------------------------------- | ------------------------------------
|Delaware                                 | 33-0085833                          
|(State of incorporation)                 | (I.R.S. Employer Identification No.)
|                                        
|102 Washington Avenue, Point Richmond,   | California 94801                    
|(Address of principal executive offices) | (Zip Code)                          

Registrants telephone number, including area code:   (510) 234-7400

|                                                            |  |                                                                                                                |  |                                          
|----------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Securities registered pursuant to Section 12(b) of the Act: |  | Title of each class                                                                                            |  | Name of each exchange
on which registered
|                                                            |  |                                                                                                                |  |                                          
|                                                            |  | None                                                                                                           |  | None                                     
|                                                           
|Securities registered pursuant to Section 12(g) of the Act: |  | Common Stock, $.001 par value
Right to Purchase Series E Junior Participating
Preferred Stock, $.001 par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.

YES  [X]    NO  [   ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of July 31, 2002 was approximately $3,792,436 (based on last
reported sale price of $0.47 per share of common stock on that date). All
directors are considered affiliates. There were 8,069,012 shares of
registrants common stock outstanding as of July 31, 2002.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

None





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TABLE OF CONTENTS



|             |                                                                         |  |  |  |  |  |  | 
|------------ | ----------------------------------------------------------------------- |  |  |  |  |  |  | 
|             | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT            
|             | ITEM 11. EXECUTIVE COMPENSATION                                        
|             | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|             | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.               
|             | ITEM 14. EXHIBITS                                                      
|SIGNATURES  
|EXHIBIT 99.1
|EXHIBIT 99.2



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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS:

|                       |  |     |  |                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                        
|---------------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |     |  | Current                                                                                                             |  | Principal Occupation for the                                                                                                                                                                                                                                                                                                                           
|                       |  |     |  | Positions with                                                                                                      |  | Past Five Years and                                                                                                                                                                                                                                                                                                                                    
|Name                   |  | Age |  | Company                                                                                                             |  | Certain Other Directorships                                                                                                                                                                                                                                                                                                                            
|                       |  |     |  |                                                                                                                     |  |                                                                                                                                                                                                                                                                                                                                                        
|                      
|                      
|                      
|                      
|Michael Patrick George |  | 52  |  | Director, President,
Chief Executive
Officer, Chairman of
the Board of Directors
and acting Chief
Financial Officer |  | Chairman of the Board of
Directors of the Company
since September 1999;
President and Chief
Executive Officer of the
Company since April 1998;
Managing Director of J.P.
Morgan, an investment
banking firm, from 1992 to
1998.                                                                                                                        
|                      
|Lee K. Harrington      |  | 56  |  | Director since
November, 2001                                                                                       |  | Mr. Harrington has been the
President and CEO of the
Los Angeles County Economic
Development Corporation
(LAEDC) since 1995, and The
World Trade Center Los
Angeles-Long Beach since
2001.                                                                                                                                                             
|                      
|Robert A. Baker        |  | 63  |  | Director since July 2000                                                                                            |  | From 1974 to present,
President & CEO of RAB
Associates, a financial
consulting firm; from 1998
to 2001, Director of Mosaic
Capital LLC, an investment
banking firm. His current
public company
directorships include
Northern Life Insurance
Company, Bankers National
Life Insurance Company,
Alpen, Inc., American
Investment Company and
Point.360.
|                      
|David A. Abel          |  | 54  |  | Director since November 1998                                                                                        |  | From 1980 to the present,
President and Chief
Executive Officer of ABL,
Incorporated, a consulting
and publishing firm; and
Corporate Director of
SuperShuttle International,
Inc. a shared-ride ground
transportation company.                                                                                                                        

Committees and Meetings of the Board of Directors

During the fiscal year ended March 31, 2002, the Board of Directors held
nine meetings. All directors attended all of the meetings during the year.

The Companys Audit Committee consists of Mr. Abel and Mr. Baker. The
Audit Committee reviews the independence, professional services, fees, plans
and results of the independent auditors engagement, and recommends the
engagement, retention or discharge of the independent auditors to the Board of
Directors. All members of the Audit Committee are independent, as independence
is defined in Rule 4200(a)(15) of the NASD listing standards. The Audit
Committee held three meetings during the fiscal year ended March 31, 2002, and
one meeting after the end of the fiscal year. All members of the Audit
Committee attended all meetings. The Audit Committee has adopted a written
Audit Committee Charter.

During the fiscal year ended March 31, 2002, the Companys Compensation
Committee held one meeting attended by both of its members, Mr. Abel and Mr.
Baker. The Compensation Committee establishes the compensation of executive
officers and administers the Companys stock option plans.

The Companys Nomination Committee consisted of Messrs. Baker and George.
It met two times during the year.

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Other than the Audit Committee, Compensation Committee and the Nomination
Committee, the Company has no committees of its Board of Directors.

EXECUTIVE OFFICERS

The following chart sets forth information as of July 31, 2002 concerning
the executive officers of the Company.

|                     |  |     |    |        |  |                                                                
|-------------------- |  | --- | -- | ------ |  | ---------------------------------------------------------------
|Name                 |  | Age |    | Office
|                     |  |     |    |       
|                    
|                    
|                    
|                    
|Michael P. George    |  |     | 52 |        |  | Chairman of the Board, President, Chief Executive Officer      
|                    
|James E. Sherman     |  |     | 45 |        |  | Executive Vice President, Chief Operating Officer and
Secretary
|                    
|William T. Gochnauer |  |     | 55 |        |  | Senior Vice President and Chief Financial Officer              

James E. Sherman joined the Company in February 2000, after having served
the Company as a consultant since September 1999. Prior to joining the
Company, from 1997 to 1999, Mr. Sherman was Chief Financial Officer of a
private engineering firm which specialized in public infrastructure
development. Mr. Sherman had previously served as a corporate finance officer
for First Interstate Bank and for Continental Illinois National Bank and Trust
Company of Chicago. He is a graduate of the University of California at
Berkeley.

William T. Gochnauer joined the Company in June 2000 as Corporate
Controller. In September 2000, he was appointed to the posts of Senior Vice
President, Treasurer and Chief Financial Officer. Prior to joining the
Company, Mr. Gochnauer was a Vice President for Corporate Development for a
subsidiary of Century Business Services, Inc., a public financial services
company. Previously, he served as Chief Financial Officer of the Devon Group
of Companies, a real estate development company. He has held Chief Financial
Officer or Corporate Controllership positions at several public and private
companies. Mr. Gochnauer began his career at the international accounting firm
now known as KPMG LLP. Mr. Gochnauer is a graduate of Armstrong College, and
is a California Certified Public Accountant.

Section 16(a) of the Securities Exchange Act of 1934 requires the
Companys directors and executive officers, as well as persons who own more
than ten percent of the Companys Common Stock, to file with the Commission
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Common Stock. Directors, executive officers and
greater-than-ten-percent stockholders are required by the Commissions
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

Based solely on a review of copies of reports filed with the Commission
and submitted to the Company since April 1, 1999 and on representations by
certain directors and executive officers of the Company, the Company believes
that all persons subject to the reporting requirements of Section 16(a) filed
all required reports on a timely basis during the past fiscal year.




ITEM 11.   EXECUTIVE COMPENSATION

Summary Compensation Table. The following tables set forth certain
information concerning the annual and long-term compensation for services
rendered to the Company in all capacities for the fiscal years ended March 31,
2002, 2001, and 2000 of (i) all persons who served as the Chief Executive
Officer of the Company during the fiscal year ended March 31, 2002 and (ii)
each of the other executive officers of the Company whose total annual salary
and bonus during the fiscal year ended March 31, 2002 exceeded $100,000. (The
Chief Executive Officer and the other named officers are collectively referred
to as the Named Executives.)

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|                            |                                    |      |      |                     |  |       |         |                       |  |                     |        |         |  |  |        |              |     | 
|--------------------------- | ---------------------------------- | ---- | ---- | ------------------- |  | ----- | ------- | --------------------- |  | ------------------- | ------ | ------- |  |  | ------ | ------------ | --- | 
|                            |                                    |      |      |                     |  |       |         |                       |  |                     |        |         |  |  |        | Long-Term   
|                            |                                    |      |      | Annual Compensation |  |       |         |                       |  | Compensation Awards
|                            |                                    |      |      |                     |  |       |         |                       |  |                    
|                            |                                    |      |      |                     |  |       |         |                       |  |                     |        |         |  |  |        | Number Stock
|Name and Principal Position |                                    | Year |      | Salary              |  | Bonus |         | Option Shares Granted
|                            |                                    |      |      |                     |  |       |         |                      
|Michael Patrick George      |                                    |      | 2002 |                     |  | $     | 367,496 |                       |  | $                   | 75,000 |         |  |  | 50,000 |             
|                            | Chairman, President, and           |      |      | 2001                |  |       | $       | 350,002               |  |                     | $      | 225,000 |  |  |        | 600,000      |    
|                            | Chief Executive Officer(1)         |      |      | 2000                |  |       | $       | 250,000               |  |                     |        |        |  |  |        | 35,000       | (4)
|                           
|James E. Sherman            |                                    |      | 2002 |                     |  | $     | 225,417 |                       |  | $                   | 17,906 |         |  |  | 20,000 |             
|                            | Executive Vice President, Chief    |      |      | 2001                |  |       | $       | 210,000               |  |                     | $      | 29,509  |  |  |        | 200,000      |    
|                            | Operating Officer and Secretary(2) |      |      | 2000                |  |       | $       | 35,793                |  |                     |        |        |  |  |        |             |    
|                           
|William T. Gochnauer        |                                    |      | 2002 |                     |  | $     | 152,250 |                       |  | $                   | 6,906  |         |  |  | 6,000  |             
|                            | Senior Vice President, Treasurer   |      |      | 2001                |  |       | $       | 114,792               |  |                     | $      | 9,308   |  |  |        | 60,000       |    
|                            | and Chief Financial Officer(3)     |      |      |                     |  |       |         |                       |  |                     |        |         |  |  |        |              |    



---

|(1) |  | Mr. George joined the Company in April 1998.                                                                                                                                                               
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Mr. Sherman joined the Company as a consultant in November 1999 and as an
employee in February 2000. The amount listed for the year 2000 is the
salary paid to Mr. Sherman during that partial fiscal year.
|   
|   
|   
|   
|(3) |  | Mr. Gochnauer joined the Company in June 2000. The amount listed is the
salary paid to Mr. Gochnauer during that partial fiscal year.                                                                      
|   
|   
|   
|   
|(4) |  | In June 2000, Mr. George voluntarily surrendered to the Company these
35,000 options, which options have been cancelled.                                                                                   

Aggregated Option Exercises in Last Fiscal Year and Year-End Option
Values. The following table sets forth information regarding stock options
that were exercised by the Named Executives during the last fiscal year and the
number and value of unexercised options owned at March 31, 2002 by the Named
Executives.

|                       |  |             |     |          |  |             |     |                   |  |                      |         |                     |  |  |         |  |  |   |         |  |  |   |         | 
|---------------------- |  | ----------- | --- | -------- |  | ----------- | --- | ----------------- |  | -------------------- | ------- | ------------------- |  |  | ------- |  |  | - | ------- |  |  | - | ------- | 
|                       |  |             |     |          |  |             |     |                   |  | Number of            |         | Value of           
|                       |  |             |     |          |  |             |     |                   |  | Unexercised Options  |         | Unexercised Options
|                       |  | Shares      |     |          |  |             |     | at March 31, 2002 |  | At March 31, 2002(1)
|                       |  | Acquired    |     | Value    |  |             |     |                  
|Name                   |  | On Exercise |     | Realized |  | Exercisable |     | Unexercisable     |  | Exercisable          |         | Unexercisable      
|                       |  |             |     |          |  |             |     |                   |  |                      |         |                    
|Michael Patrick George |  |             | -0- |          |  | $           | -0- |                   |  |                      | 216,667 |                     |  |  | 433,333 |  |  | $ | 103,500 |  |  | $ | 207,000 | 
|James E. Sherman       |  |             | -0- |          |  | $           | -0- |                   |  |                      | 73,334  |                     |  |  | 146,666 |  |  | $ | 34,734  |  |  | $ | 69,467  | 
|William T. Gochnauer   |  |             | -0- |          |  | $           | -0- |                   |  |                      | 22,000  |                     |  |  | 44,000  |  |  | $ | 10,420  |  |  | $ | 20,840  | 
|                      
|                      
|                      
|                      

---

|(1) |  | The value of unexercised options represents the excess of the market
value of the Common Stock on March 31, 2002, based on the closing price on
that day of $.86 per share, over the exercise price of the options.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Director Compensation. Effective April 1, 2000, Directors who are not
employees of the Company receive a fee of $10,000 per year for service on the
Board of Directors and an additional fee of $10,000 per year for service as the
chairman of any committee of the Board of Directors. In addition, all
directors receive $1,000 for each Board meeting they attend, and all directors
are reimbursed for out-of-pocket expenses incurred by them in connection with
attending Board meetings. Each non-employee director is automatically granted
an option on the first business day of each fiscal year to purchase 10,000
shares of Common Stock at an exercise price equal to the closing price for the
Common Stock as reported on the date of grant of such option. Such options are
exercisable as to one-third on the first, second and third anniversary of
grant. As of April 1, 2002, the annual grant to each director was increased to
20,000 shares, commencing with the grant on that date. On April 1, 2002, the
Companys three independent directors each received 20,000 options exercisable
at a price of $.86 per share.

Employment Agreements. None of the Named Executives currently is a party
to any written or oral employment agreement with the Company.

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Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

No members of the Compensation Committee are, or since April 1, 2001 have
been, officers of the Company, nor have such members had any material business
relationship with the Company.

Stock Option Plans

1993 Stock Option Plan. The 1993 Stock Option Plan (the 1993 Plan)
authorizes the granting of both incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the Code), and
nonqualified stock options to officers, non-employee directors, employees,
consultants and others performing services for the Company to purchase in the
aggregate 800,000 shares of the Companys Common Stock. The 1993 Plan is
administered by the Compensation Committee of the Board of Directors. The
Compensation Committee designates the optionees, number of options, exercise
prices, dates of grant, exercise period and other terms and conditions.

The purchase price to be paid upon exercise of each incentive stock option
granted pursuant to the 1993 Plan shall be no less than the fair market value
of the Common Stock on the date the option is granted, or 110% of such fair
market value in the case of any optionee holding in excess of 10% of the
combined voting power of all classes of the Companys capital stock (or the
stock of a parent or subsidiary of the Company) as of the date of grant. Fair
market value is equal to the closing price of the Companys Common Stock. The
purchase price and method of exercise of each nonqualified option granted to
officers and other key employees shall be determined by the Compensation
Committee. The purchase price is payable in full by cash, check, surrender of
Common Stock of the Company having a market value equal to the option price of
the shares to be purchased, or so-called cashless exercises as permitted by
law, or any combination of cash, check, shares and cashless exercises. The
Compensation Committee in its sole discretion may extend credit to pay the
purchase price of the shares of Common Stock acquired upon exercise of an
option, such credit to be evidenced by optionees interest-bearing promissory
note and secured by the Common Stock issued on exercise of the option. The
Compensation Committee has complete discretion to establish the amount and
terms of any credit extended. The Compensation Committee also has complete
discretion to determine the interest rate to be charged on such credit. No
such credit is currently extended by the Company.

Options granted under the 1993 Plan become exercisable and shall expire on
such dates as determined by the Compensation Committee, provided, however, that
no term may exceed ten years from the date of grant, or five years from the
date of grant in the case of any optionee holding more than 10 percent of the
combined voting power of all classes of the Companys capital stock (or the
stock of a parent or subsidiary of the Company) as of the date of grant. After
options become exercisable they may be exercised at any time or from time to
time as to any part thereof. The Compensation Committee may, at any time after
grant of the option and from time to time increase the number of shares
purchasable in any installment, subject to certain limitations.

Options granted under the 1993 Plan expire on such date as the
Compensation Committee has determined. Options are not transferable except by
will or by the laws of descent and distribution; during the life of the person
to whom the option is granted, that person alone may exercise them. All rights
to exercise options terminate three months from the date a grantee ceases to be
an employee of the Company or any subsidiary for any reason other than death or
disability.

If a grantee dies while in the employ of the Company, his or her option
may be exercised at any time within 12 months following the grantees death by
his or her estate or by the person or persons to whom the grantees rights
under the option passed by will or operation of law, but only to the extent
such option was exercisable by the grantee at the time of his or her death.
Except for certain stated provisions covering termination, disability or death,
no option may be exercised after the expiration of its original term.

1997 Stock Option Plan. The 1997 Stock Option Plan currently provides for
the grant of 1,400,000 options to officers, directors, other key employees and
consultants of the Company. The 1997 Stock Option Plan is administered by the
Board of Directors or a committee of the Board, and is currently administered
by the Compensation Committee of the Board of Directors, which has complete
discretion to select the optionees and to establish the terms and conditions of
each option, subject to the provisions of the 1997 Stock Option Plan. If
necessary in order to comply with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended (the Exchange Act), and Section 162(m) of the Code, the
committee shall, in the Boards discretion, be comprised solely of
non-employee directors within the meaning of said Rule 16b-3 and

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outside directors within the meaning of Section 162(m) of the Code.
Options granted under the 1997 Stock Option Plan may be incentive stock
options as defined in Section 422 of the Code, or nonqualified options, and
will be designated as such.

The exercise price of incentive stock options may not be less than the
fair market value of the Companys Common Stock as of the date of grant (110%
of the fair market value if the grant is to an employee who owns more than 10%
of the total combined voting power of all classes of capital stock of the
Company). The Code currently limits to $100,000 the aggregate value of Common
Stock that may be acquired in any one calendar year pursuant to incentive stock
options under the 1997 Stock Option Plan or any other option plan adopted by
the Company. Nonqualified options may be granted under the 1997 Stock Option
Plan at an exercise price less than the fair market value of the Common Stock
on the date of grant. Nonqualified options also may be granted without regard
to any restriction on the amount of Common Stock that may be acquired pursuant
to such options in any one year.

In general, upon termination of employment of an optionee, all options
granted to such person which were not exercisable on the date of such
termination would immediately terminate, and any options that are exercisable
would terminate up to one year following termination of employment.

Options may not be exercised more than ten years after the grant date
(five years after the grant date if the grant is an incentive stock option to
an employee who owns more than 10% of the total combined voting power of all
classes of capital stock of the Company). Except with the express approval of
the administrator with respect to nonqualified options, options granted under
the 1997 Stock Option Plan are not transferable and may be exercised only by
the respective grantees during their lifetime or by their heirs, executors or
administrators in the event of death. Under the 1997 Stock Option Plan, shares
subject to cancelled or terminated options are reserved for subsequently
granted options. The number of options outstanding and the exercise price
thereof are subject to adjustment in the case of certain transactions such as
stock splits, stock dividends, recapitalizations or reclassifications. The
1997 Stock Option Plan is effective for ten years, unless sooner terminated or
suspended. The 1997 Stock Option Plan provides that options covering no more
than 650,000 shares of Common Stock may be granted to any one employee in any
twelve-month period.

Certain Federal Income Tax Consequences

If an option is treated as an incentive stock option, the optionee will
recognize no income upon grant or exercise of the option unless the alternative
minimum tax rules apply. Upon an optionees sale of the shares (assuming that
the sale occurs at least two years after grant of the option and at least one
year after exercise of the option), any gain will be taxed to the optionee
under beneficial capital gains tax rates. If the optionee disposes of the
shares prior to the expiration of the above holding periods, then the optionee
will recognize ordinary income in an amount generally measured as the
difference between the exercise price and the lower of the fair market value of
the shares at the exercise date or the sale price of the shares. Any gain or
loss recognized on such a premature sale of the shares in excess of the amount
treated as ordinary income will be capital gain or loss. Under recently
enacted capital gains legislation, the maximum federal tax rate applicable to
such stock held for more than 12 months but less than 18 months is 28% and the
maximum federal tax rate applicable to such stock held for at least 18 months
is 20%.

All other options granted under the 1997 Stock Option Plan are
nonqualified stock options and will not qualify for any special tax benefits to
the optionee. An optionee generally will not recognize any taxable income at
the time he or she is granted a nonqualified stock option. However, upon
exercise of the nonqualified stock option, the optionee will recognize ordinary
income for federal income tax purposes in an amount equal to the excess of the
then fair market value of each share over its exercise price. Upon an
optionees resale of such shares, any difference between the sale price and the
fair market value of such shares on the date of exercise will be treated as
capital gain or loss and will generally qualify for beneficial capital gains
rates depending on the length of the holding period.

Subject to the limits on deductibility of employee remuneration under
Section 162(m) of the Code, the Company will generally be entitled to a tax
deduction in the amount that an optionee recognizes as ordinary income with
respect to an option. Options granted to executive officers under the 1997
Stock Option Plan are intended to qualify as performance-based compensation for
purposes of Section 162(m) of the Code, and the Company will generally be
entitled to a tax deduction in the amount recognized by such officers upon
exercise of the options. No tax authority or court has ruled on the
applicability of Section 162(m) to the 1997 Stock Option Plan and any final
determination of the deductibility of amounts realized upon exercise of an
option granted under the 1997 Stock Option Plan could ultimately be made by the
Internal Revenue Service or a court having final jurisdiction with respect to
the matter. The Company retains the right to

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grant options under the 1997 Stock Option Plan in accordance with the
terms of the 1997 Stock Option Plan regardless of any final determination as to
the applicability of Section 162(m) of the Code to these grants.

The foregoing does not purport to be a complete summary of the federal
income tax considerations that may be relevant to holders of options or to the
Company. It also does not reflect provisions of the income tax laws of any
municipality, state or foreign country in which an optionee may reside, nor
does it reflect the tax consequences of an optionees death.

Report of Compensation Committee on Executive Compensation

The Compensation Committee of the Board of Directors, which is composed
entirely of directors who have never been employees of the Company, is
responsible for setting and administering the policies and programs that govern
both annual and long-term compensation. During the fiscal year ended March 31,
2002, the Companys Compensation Committee was comprised of David A. Abel and
Robert A. Baker.

The Compensation Committee establishes and periodically reviews and
revises the compensation of the Chief Executive Officer. In addition, the
Compensation Committee establishes the general guidelines for compensation to
be paid to the Named Executives other than the Chief Executive Officer. The
compensation package of the other Named Executives is set by the Chief
Executive Officer and approved by the Compensation Committee. The Companys
compensation program consists of two elements: (1) an annual cash salary
component, i.e., base salary and cash bonuses when warranted, and (2) a
long-term component, i.e., stock options. The base salary of each executive
officer is based on the executives job description and a general assessment of
the executives performance, experience and potential. The amount of the
bonus, if any, and number of stock options, if any, granted to officers is also
based on the Companys success in meeting the goals set forth at the beginning
of each fiscal year. The long-term component of the compensation program
consists of the annual grant of stock options, which the Compensation Committee
believes provides the executive with the incentive to implement the Companys
annual objectives and strategy and aligns his interest with that of the
stockholders. Stock options gain value to the extent the price of the
Companys Common Stock increases above the option exercise price, thereby
creating a similar objective for both management and the stockholders.

In establishing the salaries and bonuses of the Named Executives,
including the Chief Executive Officer, the Compensation Committee during the
past fiscal year took into account the prior reductions in the number of the
Companys employees and the additional responsibilities and increased workload
each officer has had to assume due to that reduction in workforce. The salary
increases and bonuses of the executive officers for the past fiscal year, in
part, reflect the additional responsibilities and workload assumed by the
officers.

Compensation of Chief Executive Officer

Due to regulatory obstacles that have made it more difficult for the
Company to monitize many of its water assets, and the effect that the
regulatory difficulties have had on the Companys financial condition, the
Company during the past two years has had to (i) modify its prior business plan
and (ii) restructure its balance sheet. The design and implementation of the
revised business plan, and the efforts to restructure the Companys balance
sheet, have been initiated and carried out under the leadership of the Chief
Executive Officer. In evaluating the Chief Executive Officers performance,
the Compensation Committee considered the Chief Executive Officer efforts in
developing and implementing the revised business plan and in restructuring the
Companys balance sheet. Based on the foregoing evaluation, the Compensation
Committee determined that the Chief Executive Officer should receive an
increase in salary and a bonus in the fiscal year ended March 31, 2002.
Because of the Companys financial condition, the Compensation Committee
reduced the cash bonus it may have otherwise paid to the Chief Executive
Officer and recommended that the Board grant the Chief Executive Officer
additional stock options in lieu of a portion of the cash bonus.

Compliance With Internal Revenue Code Section 162(m). Section 162(m) of the
Code, enacted in 1993, generally disallows a tax deduction to publicly held
companies for compensation exceeding $1 million paid to certain of the
corporations executive officers. However, compensation which qualifies as
performance-based is excluded from the $1 million limit if, among other
requirements, the compensation is payable upon attainment of pre-established,
objective performance goals under a plan approved by the stockholders.

The compensation to be paid to the Companys executive officers for the
March 31, 2002 fiscal year did not exceed the $1 million limit per officer, nor
is it expected that the compensation to be paid to the Companys executive

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officers for fiscal 2003 will exceed that limit. The Companys 1997 Stock
Option Plan is structured so that any compensation income realized by an
executive officer as a result of the exercise of an outstanding option or the
sale of option shares under the 1997 Stock Option Plan will qualify as
performance-based compensation which will not be subject to the $1 million
limitation. Because it is very unlikely that the cash compensation payable to
any of the Companys executive officers in the foreseeable future will approach
the $1 million limit, the Compensation Committee has decided at this time not
to take any other action to limit or restructure the elements of cash
compensation payable to the Companys executive officers. The Compensation
Committee will continue to monitor the compensation levels potentially payable
under the Companys cash compensation programs, but intends to retain the
flexibility necessary to provide total cash compensation in line with
competitive practice, the Companys compensation philosophy and the Companys
best interests.

No member of the Compensation Committee is, or during Fiscal 2002 was, a
former officer or employee of the Company or of its subsidiary.

Compensation Committee: David A. Abel and Robert A. Baker.

Report of the Audit Committee

The Audit Committee oversees the Companys financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility
for the Companys consolidated financial statements and the reporting process
including the systems of internal controls. In fulfilling its oversight
responsibilities, the Audit Committee reviewed the audited consolidated
financial statements included in the Companys Annual Report on Form 10-K for
the fiscal year ended March 31, 2002 with management, including a discussion of
the effects on the consolidated financial statements of the Companys carrying
value of its assets, the Companys liquidity, and the reasonableness of
significant judgments and the clarity of disclosures in the consolidated
financial statements.

The Audit Committee held three meetings during the fiscal year ended March 31, 2002 and one meeting after the end of the fiscal year.

The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those consolidated
financial statements with accounting principles generally accepted in the
United States of America, their judgments as to the quality, not just the
acceptability, of the accounting principles applied by the Company. The Audit
Committee also discussed with the independent auditors the matters required by
Statement of Auditing Standards No. 61, Communications with Audit Committees.
In addition, the Audit Committee also discussed with the independent auditors
the auditors independence from management and the Company, including the
matters in the written disclosures required by the Independence Standards Board
and considered the compatibility of any non-audit services with the auditors
independence.

The Audit Committee is currently comprised of two of the Companys
directors, both of whom are independent as defined under the listing
standards of the National Association of Securities Dealers that are applicable
to companies whose securities are listed on Nasdaq. The Audit Committee,
operates pursuant to a charter that was approved and adopted by the Board of
Directors in 2001 attached to the Proxy Statement delivered in connection with
the September 5, 2001 annual meeting.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited consolidated financial statements be included in the Annual
Report on Form 10-K for the year ended March 31, 2002 for filing with the
Securities and Exchange Commission. The Audit Committee and the Board have
also recommended, subject to stockholder ratification, the selection of KPMG
LLP as the Companys independent auditors for the year ending March 31, 2003.

Audit Committee: David A. Abel and Robert A. Baker

Audit and Related Fees

Audit Fees. The fees billed by KPMG LLP for professional services for the
audit of the Companys annual consolidated financial statements for the fiscal
year ended March 31, 2002 and the review of the consolidated financial

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statements included in the Companys Quarterly Reports on Form 10-Q for the
fiscal year ended March 31, 2002 were $85,000.

Financial Information Systems Design and Implementation Fees. There were
no fees billed by KPMG LLP to the Company for financial information systems
design and implementation for the March 31, 2002 fiscal year.

All Other Fees. Other audit-related fees for the March 31, 2002 fiscal
year were $25,000, and included, among other things, fees for research on
accounting treatment for specific transactions. Fees billed to the Company for
non-audit-related services rendered by KPMG LLP for the past fiscal year,
primarily fees for tax compliance and tax consulting services, were $34,000.

The Audit Committee has determined that the provision of services by KPMG
LLP for all other fees is compatible with maintaining auditor independence.

9



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##### Table of Contents






ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of the Companys Common Stock, Series C Preferred Stock
and Series F Preferred Stock as of July 31, 2002 by (i) each person who is
known by the Company to own more than 5% of the outstanding Common Stock,
Series C Preferred Stock or Series F Preferred Stock; (ii) each of the
Companys directors (including the director nominees); (iii) each of the
executive officers named in the compensation tables included below in this
Proxy Statement; and (iv) all current officers and directors (including the
director nominees) of the Company as a group.

|                                                                                                                               |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | --------- | ------------------------ |  | ------------------------ | ---- | -------------- |  | --------- | ----- | -------- |  | ------------------ | ---- | - |  |  | ------- |  |  |  | --- | - |  |  | ---- | -
|                                                                                                                               |  | Common Stock |           | Series C Preferred Stock |  | Series F Preferred Stock |      |                |  |          
|                                                                                                                               |  |              |           |                          |  |                          |      | % Votes Of All
|Name and Address of                                                                                                            |  | Number       |           | Percent                  |  | Number                   |      | Percent        |  | Number    |       | Percent  |  | Classes of Capital
|Beneficial Owner(1)                                                                                                            |  | of Shares    |           | of Class                 |  | of Shares                |      | of Class       |  | of Shares |       | of Class |  | Stock(2)          
|                                                                                                                               |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                   
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Michael P. George                                                                                                              |  |              | 434,847   | (3)                      |  |                          | 5.1  | %              |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | 4.7  | %
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|David A. Abel                                                                                                                  |  |              | 41,964    | (3)                      |  |                          | *    |                |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | *    |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Robert A. Baker                                                                                                                |  |              | 13,334    | (3)                      |  |                          | *    |                |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | *    |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Lee K. Harrington                                                                                                              |  |              | 2,500     |                          |  |                          | *    |                |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | *    |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|James E. Sherman                                                                                                               |  |              | 140,000   | (3)                      |  |                          | 1.7  | %              |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | 1.5  | %
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|William T. Gochnauer                                                                                                           |  |              | 42,000    | (3)                      |  |                          | *    |                |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | *    |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|T. Rowe Price Associates, Inc.                                                                                                 |  |              | 1,040,524 | (4)(5)                   |  |                          | 12.5 | %              |  |           | 4,516 |          |  |                    | 58.6 | % |  |  | 0       |  |  |  | 0   | % |  |  | 11.7 | %
|100 East Pratt Street
Baltimore, MD 21202                                                                                      |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|T. Rowe Price New Era Fund Inc.                                                                                                |  |              | 135,912   | (5)                      |  |                          | 1.7  | %              |  |           | 2,258 |          |  |                    | 29.3 | % |  |  | 0       |  |  |  | 0   | % |  |  | 1.5  | %
|100 East Pratt Street
Baltimore, MD 21202                                                                                      |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|T. Rowe Price Small-Cap Value                                                                                                  |  |              | 800,412   | (4)(5)                   |  |                          | 9.8  | %              |  |           | 2,258 |          |  |                    | 29.3 | % |  |  | 0       |  |  |  | 0   | % |  |  | 9.0  | %
|Fund, Inc.
100 East Pratt Street
Baltimore, MD 21202                                                                           |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Wisconsin Alumni Research                                                                                                      |  |              | 67,928    | (5)                      |  |                          | *    |                |  |           | 1,129 |          |  |                    | 14.6 | % |  |  | 0       |  |  |  | 0   | % |  |  | *    |  
|Foundation
B-107, 3801 Kennett Pike
P.O. Box 4172
Wilmington, DE 19807                                                         |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Ashford Capital Management,                                                                                                    |  |              | 124,007   | (5)                      |  |                          | 1.5  | %              |  |           | 2,061 | (6)      |  |                    | 26.7 | % |  |  | 0       |  |  |  | 0   | % |  |  | 1.4  | %
|Inc. as investment advisor for
        certain investment accounts
B-107, 3801 Kennett Pike
P.O. Box 4172
Wilmington, DE 19807 |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|Interagua, Servicios Integrales del                                                                                            |  |              | 553,893   | (7)                      |  |                          | 6.6  | %              |  |           | 0     |          |  |                    | 0    | % |  |  | 2,121.8 |  |  |  | 100 | % |  |  | 6.2  | %
|Agua, S.A. Paseo de San Juan, 39
Barcelona, Spain 08009                                                                        |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|                                                                                                                              
|All directors and executive                                                                                                    |  |              | 834,645   | (8)                      |  |                          | 7.7  | %              |  |           | 0     |          |  |                    | 0    | % |  |  | 0       |  |  |  | 0   | % |  |  | 6.1  | %
|officers as a group (6 persons)                                                                                                |  |              |           |                          |  |                          |      |                |  |           |       |          |  |                    |      |   |  |  |         |  |  |  |     |   |  |  |      |  



---

|*   |  | Less than 1%.                                                                                                                                                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Except as otherwise indicated, the address of each stockholder is c/o the
Company at 102 Washington Street, Point Richmond, California 94801.                                                                                                                                                                                
|   
|   
|   
|   
|(2) |  | Based on 8,069,012 votes entitled to be cast by the holders of the
outstanding Common Stock, 463,779 votes entitled to be cast by the holders
of the 7,708 shares of outstanding Series C Preferred Stock, and 378,893
votes entitled to be cast by the holder of the 2,121.8 shares of
outstanding Series F Preferred Stock.

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##### Table of Contents



|(3) |  | Consists of shares issuable under currently exercisable Common Stock
purchase options and options which will become exercisable within 60 days
hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(4) |  | Based on information contained in a statement on Schedule 13G/A filed by
T. Rowe Price Associates, Inc. with the Securities and Exchange Commission
on February 14, 2002. Represents 768,700 shares of Common Stock
beneficially owned by T. Rowe Price Associates, Inc., and 271,824 shares
of Common Stock issuable upon the conversion of the 4,516 shares of Series
C Preferred Stock beneficially owned by T. Rowe Price Associates, Inc. T.
Rowe Price Associates, Inc. is the investment advisor of various
registered investment companies and investment advisory clients, including
(a) T. Rowe Price Small-Cap Value Fund, Inc. representing 664,500 shares
of Common Stock owned by T. Rowe Price Small-Cap Value Fund, Inc. and
135,912 shares of Common Stock issuable upon the conversion of 2,258
shares of Series C Preferred Stock beneficially owned by T. Rowe Price
Small-Cap Value Fund Inc., and (b) T. Rowe Price New Era Fund Inc.,
representing 135,912 and shares of Common Stock issuable upon the
conversion of 2,258 shares of Series C Preferred Stock beneficially owned
by T. Rowe Price New Era Fund Inc. T. Rowe Price Associates, Inc.
disclaims beneficial ownership of the shares described under (a) and (b),
above.
|   
|   
|   
|   
|(5) |  | Represents shares of Common Stock issuable upon the conversion of the
shares of Series C Preferred Stock owned by such beneficial owners.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|   
|   
|   
|(6) |  | Reflects shares held of record and beneficially owned by separate
investment accounts on behalf of 10 different investors for which Ashford
Capital Management, Inc. acts as investment advisor and has the sole power
to vote and dispose of such securities as attorney-in-fact with respect to
such accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|   
|   
|   
|(7) |  | Includes 378,893 shares of Common Stock issuable upon the conversion of
the shares of Series F Preferred Stock owned by such beneficial owner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|   
|   
|   
|(8) |  | Included 466,667 shares of Common Stock issuable upon exercise of
currently exercisable options and options which will become exercisable
within 60 days hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Equity Compensation Plan Information

The following table sets forth certain information as of March 31, 2002
regarding securities authorized for issuance under the Companys equity
compensation plans.

|                                                           |  |                            |           |                   |  |                      |      |  |  |  |         | 
|---------------------------------------------------------- |  | -------------------------- | --------- | ----------------- |  | -------------------- | ---- |  |  |  | ------- | 
|                                                           |  | Number of securities to be |           | Weighted-average  |  | Number of securities
|                                                           |  | issued upon exercise of    |           | exercise price of |  | remaining available 
|                                                           |  | outstanding                |           | outstanding       |  | For future issuance 
|                                                           |  | options, warrants          |           | options, warrants |  | under equity        
|                                                           |  | and rights                 |           | and rights        |  | compensation plan   
|                                                           |  |                            |           |                   |  |                     
|Equity compensation
plans approved by
security holders     |  |                            | 1,546,166 |                   |  | $                    | 2.55 |  |  |  | 653,834 | 
|                                                          
|Equity compensation
plans not approved
by security holders |  |                            | -  0  -   |                   |  |                      | N/A  |  |  |  | N/A     | 
|                                                          
|Total                                                      |  |                            | 1,546,166 |                   |  | $                    | 2.55 |  |  |  | 653,834 | 

The compensation plans approved by the security holders represent the
Companys 1993 and 1997 Stock Option Plans, which are described in this Form
10-K/A.

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ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

NONE




ITEM 14.   EXHIBITS

|     |  |                                         
|---- |  | ----------------------------------------
|99.1 |  | Certification of Chief Executive Officer
|    
|99.2 |  | Certification of Chief Financial Officer




SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 5, 2002

| |                       |                                                                         
| | --------------------- | ------------------------------------------------------------------------
| | WESTERN WATER COMPANY
|
| | By:                   | /S/    WILLIAM T. GOCHNAUERWilliam T. Gochnauer,
Chief Financial Officer

12