Exhibit 10.47

                              EMPLOYMENT AGREEMENT

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

      INTRODUCTION.  The  Executive is an employee of the Company as of the date
of this  Employment  Agreement.  The Company and the  Executive  are desirous of
entering into this Employment Agreement.

      1.  EMPLOYMENT.  The  Company  will  employ  the  Executive  as the  Chief
      Operating  Officer of the Company,  reporting to the  President  and Chief
      Executive Officer.

      2. COMPENSATION.

            (a) Salary.  The  Executive  will  receive a salary of $125,000  per
            annum. In no event will the Executive's salary be less than $125,000
            per annum during his employment except in that case where management
            or senior management has imposed upon it a temporary salary cut. The
            Executive  acknowledges  that  at the  time  of the  making  of this
            agreement, Executive's salary has been reduced by 10% in a temporary
            measure as set forth above.

            (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  $125,000. As used
            herein,  "cause"  shall  be  limited  to gross  negligence,  willful
            misconduct or conviction of a felony.  Executive  shall have one (1)
            year  after  employment   separation  to  exercise  any  vested  but
            unexercised stock options.

            (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.

                                           /s/ William A. Schmitz
                                           --------------------------
By:  /s/ John D. Kavazanjian               William A. Schmitz
----------------------------


                                       64