Exhibit 10.45

                              EMPLOYMENT AGREEMENT

Employment  Agreement made as of the 20th day of September  2002, by and between
Ultralife  Batteries,   Inc.  (the  "Company")  and  John  D.  Kavazanjian  (the
"Executive").

      INTRODUCTION.  The Company hired the Executive  pursuant to a letter dated
June 14,  1999;  attached  hereto and made a part  hereof.  The  Company and the
Executive wish to extend the terms and conditions of the Executive's employment.

      1. EMPLOYMENT.  The Company will employ the Executive as the President and
      Chief  Executive  Officer  of the  Company,  in charge  of all  corporate,
      day-to-day  and financial  activities of the Company.  The Executive  will
      report to the Company's Board of Directors.

      2. COMPENSATION.

            (a) Salary.  The  Executive  will  receive a salary of $300,000  per
            annum. In no event will the executive's salary be less than $300,000
            per annum during his employment except in that case where management
            or senior  management has imposed upon it a temporary salary cut. In
            that  contingency,  Executive  shall  have the  option  to  accept a
            similar  salary cut,  at his own and sole  discretion.  However,  by
            accepting  any  temporary  cut  Executive  does not  waive any other
            rights under this agreement.

            (b)  Other   Benefits.   The  Executive  will   participate  in  all
            perquisites afforded to its senior management personnel from time to
            time,  including  participation  in any bonus plans  established for
            management or senior management of the Company.

      3. TERM.

            (a) This  agreement is for  "at-will"  employment.  However,  should
            Executive  be  terminated  by the Company,  except for  "cause",  as
            defined below, prior to July 1, 2003, Executive shall be entitled to
            receive within 30 days following such termination $300,000, and that
            portion of the option granted in the offer dated June 14, 1999 which
            is  scheduled  to vest  on the  next  July  12 will  vest as of such
            termination  date.  Executive  shall have (1) year after  employment
            separation to exercise any vested but unexercised stock options.  As
            used herein,  "cause" shall be limited to gross negligence,  willful
            misconduct or conviction of a felony.

            (a) (b) On  February 1, 2003,  both the  Company  and the  Executive
            shall have the option of terminating  this agreement  effective June
            30, 2003. Notice of intent to terminate shall be made in writing and
            delivered  to the other party by  February  1. In the event  neither
            party opts to terminate,  this agreement  shall renew  automatically
            for another year,  each year,  and the parties shall  continue to be
            required to give notice of intent to  terminate by February 1 of the
            year in which the agreement is intended to be  terminated  effective
            June 30.

      4.  MISCELLANEOUS.  This Agreement is the entire agreement with respect to
      the  employment of the Executive by the Company and may be amended only by
      a  written  agreement  signed  by both  parties  to this  Agreement.  This
      Agreement shall be governed by the internal laws of the State of New York.

      IN WITNESS WHEREOF, the parties have signed or caused this Agreement to be
signed as of the date first set forth above.

Ultralife Batteries, Inc.

By:  /s/ Peter F. Comerford                 /s/ John D. Kavazanjian
- ---------------------------                 --------------------------
                                            John D. Kavazanjian


                                       62