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                                                                   EXHIBIT 10.35
                              U.S. BIOSCIENCE, INC.
                              INCOME DEFERRAL PLAN

         The Board of Directors of U.S. Bioscience Inc. ("USB") wishes to make
additional retirement benefits available to certain key executive employees of
USB whose retirement benefits are otherwise restricted because of the
limitations imposed on contributions to the USB Savings Plan by the Federal tax
laws. Such benefits shall be provided to those individuals under the terms and
conditions hereinafter set forth.

                                    ARTICLE 1

                                   Definitions

1.1      "Account" means a bookkeeping account established pursuant to Section
         3.1 which reflects the amount standing to the credit of the Participant
         under the Plan.

1.2      "Affiliated Company" means any subsidiary of USB.

1.3      "Base Compensation" means the annual amount of base salary and wages
         paid by the Employer to an Executive for any Plan Year, including
         amounts contributed under an arrangement maintained by the Employer
         pursuant to Section 125 or 401(k) of the Code as well as under this
         Plan, but excluding all Employer contributions to benefit plans and all
         other forms of compensation; provided, however, that the amount of the
         Social Security Wage Base for the Plan Year of determination shall be
         subtracted in order to determine a Participant's Base Compensation.

1.4      "Beneficiary" means the person(s) designated by a Participant to
         receive any benefits payable under this Plan subsequent to the
         Participant's death. In the event a Participant has not filed an
         effective Beneficiary designation with the Committee, in such form as
         the Committee shall specify, the Beneficiary shall be the Participant's
         surviving spouse or, if there is no surviving spouse, the Participant's
         estate.

1.5      "Board" means the Board of Directors of USB, the Compensation Committee
         of the Board or other committee designated by the Board to act under
         this Plan on behalf of USB or an Employer.

1.6      "Bonus" means bonus compensation awards that may become due to the
         Executive under any incentive plan of an Employer.

1.7      "Code" means the Internal Revenue Code of 1986, as the same may be
         amended from time to time.


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1.8      "Committee" means the committee appointed by the Board to administer
         the Plan.

1.9      "Disability" means a condition resulting in permanent and total
         disability within the meaning of the Employer's group long term
         disability plan (or a condition that would qualify the Participant for
         a benefit under such plan if such Participant were employed by the
         Employer).

1.10     "Effective Date" means April 1, 1997.

1.11     "Executive" means any individual employed by an Employer, on a regular,
         full-time basis, in a key management or other highly compensated
         position, within the meaning of Section 201(2) of ERISA (as determined
         in accordance with the personnel policies and practices of the
         Employer), or who is an officer or otherwise considered to be a member
         of the Employer's senior management, but shall not include any
         individual who is a member of the Board but is not employed by USB.

1.12     "Employer" means USB and/or any Participating Employer, either
         collectively or individually, as the context requires.

1.13     "ERISA" means the Employee Retirement Income Security Act of 1974, as
         the same may be amended from time to time.

1.14     "Participant" means any Executive who is designated as eligible to
         participate, pursuant to Section 2.1. In the event of the death or
         incompetency of a Participant, the term shall mean his or her personal
         representative or guardian. An individual shall remain a Participant
         until a full distribution of any amount credited to the Participant's
         Account has occurred.

1.15     "Participating Employer" means each Affiliated Company that the Board
         has authorized to cover its Executives under the terms of the Plan and
         which has elected to do so by resolutions of its board of directors.

1.16     "Plan" means the U.S. Bioscience, Inc. Income Deferral Plan as the same
         is set forth in this text, and as it may be amended from time to time.

1.17     "Plan Year" means each calendar year during which the Plan is in effect
         commencing on the Effective Date.

1.18     "Separates from Employment" means the Executive's termination of
         employment from the Employer for any reason other than a Disability.
         Except as otherwise provided herein, a Separation from Employment shall
         be deemed to have occurred on the last day of the Executive's service
         to the Employer and shall be determined without reference to any
         compensation continuation arrangement or severance benefit



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         arrangement that may be applicable. With respect to an Executive who is
         a member of the Board but who is not otherwise employed by the
         Employer, such individual's Separation from Employment shall mean the
         last day such individual serves as a member of the Board.

1.18     "USB" means U.S. Bioscience, Inc., a Delaware corporation and its
         successors.

                                    ARTICLE 2

                                   Eligibility

2.1      Each Executive may participate if so designated by the Board on such
         date as is specified by the Board. A list of the Participants in the
         Plan on the Effective Date is attached hereto as Exhibit A; such list
         may be modified from time to time by the Board.

                                    ARTICLE 3

                                    Deferrals

3.1      Prior to the commencement of a Plan Year, or, for the Plan Year which
         includes the Effective Date or the date on which an Executive first
         becomes a Participant, within 30 days of becoming a Participant, a
         Participant may elect to have the Employer credit to the Participant's
         Account (as a result of a written salary or bonus deferral election) an
         amount equal to (i) any whole percentage or dollar amount of the
         Participant's Bonus, if any, to be earned for that Plan Year or (ii)
         any whole percentage or dollar amount of the Participant's Base
         Compensation to be earned during that Plan Year; provided, however,
         that the minimum amount that a Participant may elect to defer for any
         Plan Year is $3,600. Such election shall remain in effect until
         prospectively discontinued by the Participant in the manner specified
         by the Committee. If an election is made to have a contribution
         credited to the Participant's Account for a Plan Year, the credit shall
         be made at the time that such amount would otherwise have been paid and
         shall reduce the Participant's Bonus or Base Compensation, as
         applicable, with respect to that Plan Year by a corresponding amount.
         The Board may establish other minimum or maximum amounts that may be
         deferred under this Section and may change such standards from time to
         time. Any such limits shall be communicated by the Board to the
         Committee and by the Committee to the Participants prior to the
         commencement of a Plan Year. A Participant who wishes to receive a
         distribution of all or a portion of the amount so deferred prior to the
         date that the Participant Separates from Employment must also make the
         election described in Section 4.2 at the time the Participant elects a
         deferral under this Section, in the manner specified by the Committee.

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3.2      The Board shall cause the Employer to create and maintain on its books
         an Account for each of its Participants to which it shall credit
         amounts contributed to the Plan pursuant to this Article 3. The
         Employer shall also credit each Participant's Account with deemed
         earnings for each Plan Year in accordance with the provisions of
         Article 8.

3.3      Any elections under this Article shall be made in writing on such form
         as the Committee shall specify. Subject to the provisions of Section
         4.3, any election by a Participant pursuant to this Article shall be
         irrevocable and may be modified only prospectively.

                                    ARTICLE 4

                          Distributions to Participants

4.1      Unless a Participant makes the election described in Section 4.2, the
         Participant's benefit under the Plan shall be paid in one lump sum as
         soon as practicable (but no later than 60 days) following the
         completion of the valuation of the Participant's Account for the last
         business day of the second Plan Year following the Plan Year in which
         the Participant Separates from Employment. A Participant who incurs a
         Disability shall not be deemed to have Separated from Employment until
         180 days have elapsed after incurring the Disability. Notwithstanding
         anything herein to the contrary, at the time of the deferral election
         under Section 3.1 or no later than the end of the Plan Year (or within
         30 days thereafter, if later) in which the Participant Separates from
         Employment, the Participant may elect, in the manner specified by the
         Committee, to (i) defer the distribution of the Participant's total
         Account until the Plan Year in which the Participant attains age 65 (or
         later date of actual retirement, if employed beyond age 65) or (ii)
         receive distribution in annual installments over a period not to exceed
         3 years if the amount to be distributed is over $30,000 but less than
         $100,000 or 10 years if the amount to be distributed is $100,000 or
         over (with the balance to be distributed continuing to be deemed
         invested pursuant to Article 8 and distributed by dividing the
         remaining Account balance by the number of installments remaining);
         provided, that in the event that a Participant fails to make an
         election, distribution shall be in one lump sum at the time specified
         in the first sentence of this Section 4.1.

4.2      Pursuant to the in-service distribution option provision specified in
         Section 3.1, in the event that a Participant wishes to receive a
         distribution of deferred amounts credited to the Participant's Account
         prior to Separation from Employment, the Participant may make an
         in-service distribution election; provided, however, that no
         Participant may make more than two in-service distribution elections
         during the Participant's participation in the Plan. The election, as to
         any one Plan Year's deferral, shall be made at the time the Participant
         first makes the election to defer under Section 3.1, or



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         as of the beginning of any new Plan Year thereafter as to deferrals for
         a Plan Year made on or after such election. Such election shall be to
         receive all or the portion of the balance credited to the Participant's
         Account that is attributable to the in-service distribution election
         for the Plan Year of the election on the date in the future specified
         in the in-service distribution election. The in-service distribution
         election shall specify a percentage of the amount so deferred
         (including earnings) to be distributed and the year in which such
         distribution is to be made which may not be earlier than 5 years
         following the Plan Year in which the deferral is credited to the
         Participant's Account. The in-service distribution shall be paid in the
         form of a lump sum or in up to three annual installments (with the
         balance to be distributed continuing to be deemed invested under
         Article 8 and distributed by dividing the remaining Account balance by
         the number of installments remaining), as elected by the Participant,
         in the manner and at the time specified by the Committee, to be made or
         commence by the last day of January of the Plan Year specified based on
         the value of the Participant's Account as of the last day of the
         preceding Plan Year.

4.3      The Committee, in its sole discretion, may accelerate the time of
         distribution of all or a portion of the Participant's Account, if the
         Participant experiences a severe financial hardship due to illness,
         accident or death in the immediate family, loss of or damage to
         property due to casualty, or other extraordinary and unforeseeable
         circumstances. Such Participant shall provide the Committee with a
         statement in reasonable detail as to the nature of such financial
         hardship together with a statement that such acceleration is necessary
         to alleviate such hardship. In addition, the Committee shall accelerate
         the time of distribution of all or a portion of the Participant's
         Account in accordance with the provisions of Section 7.1.

4.4      The Board, in its sole discretion, may override any election made by a
         Participant under the Plan and direct a distribution of all or a
         portion of the balance credited to a Participant's Account at any time.

                                    ARTICLE 5

                                  Death Benefit

5.1      In the event of the death of a Participant prior to commencement of any
         payments due pursuant to Article 4, the Participant's Beneficiary shall
         receive a distribution equal to the balance of the Participant's
         Account on the date of death. The benefit payment to the Beneficiary
         shall be made in lump sum as soon as practicable (but no later than 60
         days) following the completion of the valuation of the deceased
         Participant's Account as of the last day of the month in which the
         Participant's death occurs. In the event of the death of a Participant
         after payment of a benefit has commenced in installments, pursuant to
         Section 4.1, the Participant's Beneficiary shall receive a lump sum
         payment of all amounts remaining due following the Participant's death
         as soon as 



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         practicable (but no later than 60 days) following the completion of the
         valuation of the deceased Participant's Account as of the last day of
         the month in which the Participant's death occurs.

                                    ARTICLE 6

                                     Vesting

6.1      The balance credited to a Participant's Account shall be fully vested
         at all times.

                                    ARTICLE 7

                                     Funding

7.1      The Board may, but shall not be required to, authorize the
         establishment of a trust by USB to serve as the payment vehicle for the
         benefits due under the Plan in accordance with the provisions of
         Articles 4 and 5 and for the deemed investment of the amounts credited
         to a Participant's Account under Article 8. Notwithstanding anything
         herein to the contrary, a Participant may make a written election, at
         the time and in the manner specified by the Committee, to withdraw
         amounts credited to the Participant's Account for which the trust is to
         serve as the payment vehicle upon the forfeiture of 10% of the balance
         credited to the Participant's Account that is to be withdrawn and the
         value of the Participant's Account shall be reduced accordingly. In any
         event, the Employers' obligations hereunder shall constitute a general,
         unsecured obligation, payable solely out of general assets, and no
         Participant shall have any right to any specific assets of the
         Employer. In addition, it is the intention of the Employer that the
         Plan be unfunded for tax purposes and for purposes of Title I of ERISA.
         USB shall not be required to provide any Participant with information
         with respect to its financial condition.

                                    ARTICLE 8

                                   Investments

8.1      The balance credited to a Participant's Account shall be deemed to be
         invested, as elected by the Participant in one or more of the
         investments or investment funds designated as available under the Plan
         for the purposes hereof by the Committee, as listed on Exhibit B
         hereto, as it may be changed by the Board from time to time. A
         Participant may make changes in the deemed investment elections in
         accordance with procedures specified by the Committee. USB shall credit
         the Participant's Account with the interest, earnings or losses with
         respect to the balance then credited to the Participant's Account,
         equal to the investment return produced by the Participant's deemed
         investments under this Section, based on the assumption that the
         contributions 



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         attributable to the Participant's Base Compensation for each calendar
         month of a Plan Year are credited to the Participant's Account on the
         last day of each such calendar month and the portion of the
         contribution attributable to the Participant's Bonus is credited to the
         Participant's Account within 30 days after such Bonus would otherwise
         have been paid.

8.2      In no event shall any Participant be entitled to have any investments
         under Section 8.1 actually made other than on a deemed basis as
         provided in Section 8.1. The Committee shall inform each eligible
         Participant as to (i) how such elections may be made, (ii) the manner
         and the time it has prescribed for making deemed investment changes and
         (iii) how to make prospective changes in deemed current investments of
         contributions. The Committee shall provide each Participant with
         periodic statements as to the value of the Participant's Account and
         shall be responsible for furnishing appropriate election forms to each
         Participant and for keeping appropriate records.

                                    ARTICLE 9

                        Administration and Other Actions

9.1      The Committee shall have full power and authority to interpret the
         Plan, to prescribe, amend and rescind any rules, forms and procedures
         as it deems necessary or appropriate for the proper administration of
         the Plan and to make any other determinations, including factual
         determinations, and to take any other such actions as it deems
         necessary or advisable in carrying out its duties under the Plan. All
         action taken by the Committee arising out of, or in connection with,
         the administration of the Plan or any rules adopted thereunder, shall,
         in each case, lie within its sole discretion, and shall be final,
         conclusive and binding upon the Employer, the Board, all Executives and
         Beneficiaries and all persons and entities having an interest therein.

9.2      The Committee shall serve without compensation for their services
         unless otherwise determined by the Board. All expenses of administering
         the Plan shall be paid by the Employer.

9.3      USB shall indemnify and hold harmless each member of the Committee from
         any and all claims, losses, damages, expenses (including counsel fees)
         and liability (including any amounts paid in settlement of any claim or
         any other matter with the consent of the Board) arising from any act or
         omission of such member, except when the same is due to gross
         negligence or willful misconduct.

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9.4      Any decisions, actions or interpretations to be made under the Plan by
         USB, the Employer or the Board shall be made in its respective sole
         discretion, not as a fiduciary, need not be uniformly applied to
         similarly situated individuals and shall be final, binding and
         conclusive on all persons interested in the Plan.

9.5      In the case of any Participant (whether active, retired or terminated)
         or Beneficiary who wishes to file a claim as to the payment of a
         benefit under this Plan, the Committee shall provide adequate notice in
         writing of any adverse determination setting forth the specific reasons
         for such denial in a manner calculated to be understood by the
         recipient thereof. Such Participant or Beneficiary shall be afforded a
         reasonable opportunity for a full and fair review of the decision
         denying the claim by the Board.

                                   ARTICLE 10

                                    Amendment

10.1     The Board, acting on behalf of USB, and not as a fiduciary, may at any
         time, and from time to time, amend this Plan in any respect without
         restriction and without the consent of any Participant; provided that
         any such amendment shall not, without the consent of any Participant
         then entitled to a benefit under the Plan, impair such Participant's
         right to receive that benefit accrued hereunder prior to such
         amendment.

                                   ARTICLE 11

                                   Termination

11.1     Continuance of the Plan is completely voluntary and is not assumed as a
         contractual obligation of the Employer. The Board, acting on behalf of
         USB and not as a fiduciary, shall have the right to terminate the Plan
         in whole or in part at any time all without the consent of, or notice
         to, any person or entity; provided, however, that such termination
         shall not have the effect of divesting a Participant of the benefit
         which the Participant would otherwise receive hereunder at the time the
         termination is approved. In the event of the termination of the Plan,
         USB may distribute a benefit to a Participant as if such Participant
         had a Separation from Service as of the date of the termination of the
         Plan or postpone distribution until such time as distribution would
         ordinarily be made to the Participant under the terms of the Plan.

                                   ARTICLE 12

                                  Miscellaneous

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12.1     Nothing contained herein (i) shall be deemed to exclude a Participant
         from any compensation, bonus, pension, insurance, severance pay or
         other benefit to which he or she otherwise is or might become entitled
         as an Executive or (ii) shall be construed as conferring upon an
         Executive the right to continue in the employ of the Employer.

12.2     Any amounts payable hereunder shall not be deemed salary or other
         compensation to a Participant for the purposes of computing benefits to
         which the Participant may be entitled under any other arrangement
         established by the Employer for the benefit of its employees. All
         payments of benefits shall be reduced by any withholding required by
         applicable Federal, state and local law.

12.3     The rights and obligations created hereunder shall be binding on a
         Participant's heirs, executors and administrators and on the successors
         and assigns of the Employer.

12.4     The masculine pronoun whenever used shall include the feminine and the
         singular shall be construed as the plural, where applicable.

12.5     The provisions of the Plan shall be construed and applied under the
         laws of the Commonwealth of Pennsylvania.

12.6     The rights of any Participant under this Plan are personal and may not
         be assigned, transferred, pledged or encumbered. Any attempt to do so
         shall be void. In addition, a Participant's rights hereunder are not
         subject, in any manner, to anticipation, alienation, sale, transfer,
         assignment, pledge, encumbrance, attachment or garnishment by creditors
         of the Participant or the Participant's Beneficiary.

12.7     If any provision of the Plan shall be held invalid or unenforceable,
         such invalidity or unenforceability shall not effect any other
         provisions hereof and the Plan shall be construed and enforced as if
         such provisions had not been included.

12.8     The headings and captions herein are provided for convenience only, and
         shall not be construed as part of the Plan, and shall not be employed
         in the construction of the Plan.

12.9     Any benefit payable to or for the benefit of a payee who is a minor, an
         incompetent person, or is otherwise incapable of receipting therefor
         shall be deemed paid when paid to such person's guardian or to the
         party providing, or reasonably appearing to provide, the care for such
         person, and such payment shall fully discharge the Employer, the
         Committee, the Board and all other parties with respect thereto.

                                   ARTICLE 13

                                Claims Procedure

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13.1     Each Participant or Beneficiary believing himself or herself eligible
         for a benefit under the Plan shall apply for such benefits by
         completing and filing with the Committee an application for benefits on
         a form supplied by the Committee. In the event that any claim for
         benefits is denied in whole or in part, the Participant or Beneficiary
         whose claim has been so denied shall be notified of such denial in
         writing by the Committee. The notice advising of the denial shall
         specify the reason or reasons for denial, make specific reference to
         pertinent Plan provisions, describe any additional material or
         information necessary for the claimant to perfect the claim (explaining
         why such material or information is needed), and shall advise the
         Participant or Beneficiary of the procedure for the appeal of such
         denial. All appeals shall be made by the following procedure:

         (a) The Participant or Beneficiary whose claim has been denied shall
         file with the Committee a notice of desire to appeal the denial. Such
         notice shall be filed within 60 days of notification by the Committee
         of claim denial, shall be made in writing, and shall set forth all of
         the facts upon which the appeal is based. Appeals not timely filed
         shall be barred.

         (b) The Committee shall consider the merits of the claimant's written
         presentations, the merits of any facts or evidence in support of the
         denial of benefits, and such other facts and circumstances as the
         Committee shall deem relevant.

         (c) The Committee shall ordinarily render a determination upon the
         appealed claim within 60 days after receipt which determination shall
         be accompanied by a written statement as to the reasons therefor.
         However, in special circumstances the Committee may extend the response
         period for up to an additional 60 days, in which event it shall notify
         the claimant in writing prior to commencement of the extension. The
         determination so rendered shall be binding upon all parties.

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                                    EXHIBIT A

PARTICIPANTS ON THE EFFECTIVE DATE:

         All Executives with title of Director or above.





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                                    EXHIBIT B

INVESTMENT FUNDS ON THE EFFECTIVE DATE:

     Vanguard Money Market Reserves Prime Portfolio
     Fidelity Investor Asset Manager Fund
     Vanguard Index Trust 500 Portfolio
     Fidelity Advisor Equity Income Fund
     Vanguard Fixed Income Securities Fund Intermediate-Term Corporate Portfolio




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