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                                                                    EXHIBIT 4.36

                                                                  CONFORMED COPY

                           MEMORANDUM OF UNDERSTANDING

1.       PARTIES:

         Marconi Corporation plc ("Corp"), Marconi plc ("plc") and the Pension
         Benefit Guaranty Corporation ("PBGC").

2.       SUBJECT MATTER:

         A.       Marconi USA Employees' Retirement Plan (the "Marconi Plan").

         B.       RELTEC Corporation Retirement Plan (the "RELTEC Plan" and,
                  collectively with the Marconi Plan, the "Plans")

3.       DEFINITIONS:

         "Agreement" shall mean this Memorandum of Understanding between the
         Parties.

         "Code" shall mean the Internal Revenue Code of 1986, as amended, 26
         U.S.C. Section 1, et. seq., and any successor statute of similar
         import, together with regulations thereunder, in each case as in effect
         from time to time. References to sections of the Code shall be
         construed to refer also to any successor or substantially related
         sections of similar import.

         "Controlled Group" shall have the meaning set forth in 29
         U.S.C. Section 1301(a)(14).

         "Corp Group" shall mean Corp and members of the Controlled Group for
         the Plans.

         "Effective Date" means the date described in Section 4.

         "Enhanced Contributions" means the cash contributions that each member
         of the Corp Group is jointly and severally obligated to pay to the
         Plans defined in Section 5(A)(ii) of this Agreement.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended, 29 U.S.C. Sections 1001 et seq., and any succesSOr statute of
         similar import, together with the regulations thereunder, in each case
         as in effect from time to time. References to sections of ERISA shall
         be construed to refer to any successor or substantially related
         sections.

         "Investment Grade" shall mean ratings on an entity's outstanding
         unsecured debt from Standard & Poor's and Moody's of at least BBB and
         Baa2, respectively, and, with respect to any purchaser in any Sale (as
         defined in Section 5B(1)), shall be determined by


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         looking at the parent corporation of the purchaser's controlled group,
         taking account of the Sale.

         "Maximum Tax Deductible Contribution Amount" means, with respect to a
         Plan Year, the maximum amount of contributions to the Plans for such
         Plan Year that would be tax deductible pursuant to Code Section 404,
         determined as if the applicable interest ratE is the lowest interest
         rate in the "permissible range" prescribed by Code Section
         412(b)(5)(B)(ii), as modified by Code Section 412(l)(7)(C), or any
         successor provisions thereto to determine "current liability" as
         defined under Code Section 412.

         "Minimum Funding Contribution" means, as to any of the Plans, the
         minimum funding requirements under Code Section 412.

         "Normal Cost" shall mean that portion of the Plans' liabilities
         accruing on an annual basis using the Plans' then current actuarial
         assumptions and funding method.

         "PBGC" means the Pension Benefit Guaranty Corporation, the United
         States government agency that administers and enforces the mandatory
         termination insurance program for defined benefit pension plans under
         Title IV of ERISA, 29 U.S.C. Sections 1301-1461.

         "Plan Year" means, as to any of the Plans, the "plan year" as defined
         in ERISA, 29 U.S.C. Section 1002(39), provided that for purposes
         hereof, any "Plan Year" shall equal twelve months.

         "Required Credit Balance" means, with respect to each Plan, the amount
         in each Plan's funding standard account determined in accordance with
         Section 5 of this Agreement.

4.       EFFECTIVE DATE:

         This Agreement shall be effective as of the date on which an office
         copy of the order of the High Court of England and Wales sanctioning
         the Corp scheme of arrangement between Corp and certain of its
         creditors under section 425 of the Companies Act of 1985 of Great
         Britain shall have been delivered to the registrar of companies in
         England and Wales for registration ("Effective Date").

         This Agreement is effective as of the Effective Date; provided,
         however, that the parties' obligations under Sections 5 and 6 of this
         Agreement shall commence upon the date of execution of this Agreement;
         and, further provided, that this Agreement shall terminate
         automatically and be of no further force or effect if, at any time
         prior to the Effective Date, the Corp scheme of arrangement described
         in the preceding paragraph of this Section 4 is withdrawn by Corp from
         the High Court's consideration without immediate intention of reseeking
         the High Court's sanction. This document is binding on all parties.

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5.       CORP OBLIGATIONS:

         A.       FUNDING OBLIGATIONS:

                  Except as otherwise provided herein, Corp shall, or shall
                  cause its U.S. subsidiaries which are participating employers
                  in the Plans to annually contribute to the Plans an amount
                  equal to

                           (i)      Each Plan's respective Minimum Funding
                                    Contributions, or, if greater, each Plan's
                                    Normal Cost plus interest; plus

                           (ii)     Enhanced Contributions in the amount of $7
                                    million per annum with respect to the
                                    Marconi Plan and $2 million per annum with
                                    respect to the RELTEC Plan;

                  provided, however, that no amount shall be required to be
                  contributed beyond the Maximum Tax Deductible Contribution
                  Amount. Enhanced Contributions shall be made quarterly
                  beginning on June 30, 2003.

                  Notwithstanding the foregoing, neither Corp nor its U.S.
                  subsidiaries shall have any obligation to make contributions
                  to the Plans under this Agreement which, when aggregated with
                  Minimum Funding Contributions, exceed $20 million during the
                  first 18 calendar months that commence after the Effective
                  Date (the "18-Month Period"); provided, however, that (i)
                  nothing herein shall relieve Corp and its U.S. subsidiaries
                  from making Minimum Funding Contributions required by law to
                  be contributed during the 18-Month Period, and (ii) to the
                  extent that Corp and its U.S. subsidiaries are relieved under
                  this paragraph from making contributions during the 18-Month
                  Period, then the amount of any such contributions which is not
                  paid into the Plans during the 18-Month Period will be
                  contributed to the applicable Plans within 60 days following
                  the expiration of the 18-Month Period (or if any portion
                  thereof would be in excess of the Maximum Tax Deductible
                  Contribution Amount, within 30 days after Corp or one of its
                  U.S. subsidiaries determines, based upon its receipt of the
                  actuarial valuation report for the relevant Plan Year that
                  such amount, or portion thereof, would be tax deductible).

         B.       SALE OF U.S. BUSINESS UNITS:

                  (1)      Transfer of Plans' assets and liabilities. PBGC
                           consent will be obtained in advance of Corp entering
                           into an agreement to sell any of its U.S. business
                           units to a third-party purchaser (a "Sale") whose
                           debt both before the sale and immediately following
                           consummation of the Sale is not rated Investment
                           Grade, but only to the extent that such Sale
                           contemplates a proposed transfer of assets and
                           liabilities of the Plans to plan(s) of such
                           purchaser. Where PBGC consent is required, PBGC will
                           make its determination whether to consent as soon as
                           reasonably practicable, taking into consideration the
                           deadlines applicable to the transaction of which it
                           has been notified by Corp or its affiliates, but not
                           to exceed 30 days. With

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                  respect to the transfer of the Plans' assets and liabilities
                  in connection with any Sale (i.e., whether or not the
                  purchaser's debt is rated Investment Grade before and
                  immediately following consummation of the Sale), any such
                  transfer will be in accordance with Code Section 414(l) using
                  PBGC safe harbor termination assumptions. Any assets in excess
                  of such Code Section 414(l) benefit liabilities in a Plan will
                  be retained in the applicable Plan and not be subject to
                  transfer in the event such Plan is split.

         (2)      No transfer of Plans' assets and liabilities. In the event of
                  a Sale in which the Plans' assets and liabilities associated
                  with the business being sold are not transferred to a plan of
                  a third-party purchaser, a reasonable estimate of the portion
                  of the proceeds of the Sale representing the net underfunding
                  that would otherwise be transferred to such purchaser in
                  accordance with the last sentence of Section 5(B)(1) and this
                  Section 5B(2) shall be contributed to the applicable Plan or
                  Plans no later than the next business date following the
                  effective date of such Sale (or as soon as reasonably
                  practicable thereafter, but in no case later than 15 days
                  thereafter, if and to the extent that any portion of the
                  proceeds received in such Sale are non-cash), and any
                  remaining amount in excess of the estimated amount shall be
                  contributed within 30 days of the date of the Sale. At least
                  30 days prior to the effective date of such Sale, Corp will
                  notify PBGC of the proposed Sale, the relevant pension data,
                  and the calculation of the money to be transferred to the
                  Plan. For purposes of the preceding sentence, the net
                  underfunding shall be computed based on the present value of
                  the applicable Plan's assets and liabilities as of the date of
                  the Sale and using the applicable actuarial assumptions then
                  being used by the PBGC for purposes of calculating plan
                  termination liability and using such other actuarial liability
                  projection methodology considered reasonable by Corp to
                  determine such liabilities on the Sale date based on employee
                  data as of the date of the most recent actuarial valuation for
                  the Plan updated to reflect significant demographic changes.
                  Any such amount contributed to the Plans may be used by the
                  Plans' respective trustees to purchase annuities in
                  satisfaction of liabilities under the Plans. Notwithstanding
                  the foregoing, no amount shall be required to be contributed
                  under this Section 5(B) beyond the Maximum Tax Deductible
                  Contribution Amount.

         (3)      In addition to the above, if the Plan Sponsor of the RELTEC
                  Plan is sold and the purchaser is, and will be immediately
                  after the Sale, an Investment Grade company, Corp will make
                  reasonable best efforts to have the purchaser assume
                  sponsorship of the RELTEC Plan and the Plan's assets and
                  liabilities. If the Purchaser is not Investment Grade, or does
                  not assume the RELTEC Plan, then proceeds of the sale shall be
                  used to pay into the RELTEC Plan sufficient monies to make the
                  RELTEC Plan fully funded on a PBGC termination basis, such
                  amount to be contributed in accordance with the timeframe set
                  forth above in the first sentence of Section 5B(2).

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         C.       CREDIT BALANCE RESTRICTIONS:

                  (1)      Subject to Section 5 of this Agreement, Corp shall
                           maintain the Required Credit Balance for each Plan
                           throughout the term of this Agreement as follows:

                           (a)      The Required Credit Balance with respect to
                                    each Plan shall be the sum of (i), (ii),
                                    (iii) and (iv) below, where

                                    (i)      is the credit balance in the Plan's
                                             Funding Standard Account for the
                                             Plan Year ending December 31, 2002,
                                             as determined by the Plan's
                                             enrolled actuary;

                                    (ii)     is the Enhanced Contributions
                                             discussed in Sections 3 and 5 of
                                             this Agreement;

                                    (iii)    is any amount contributed to the
                                             Plans in connection with the sale
                                             of a U.S. business unit; and

                                    (iv)     is the amount of interest
                                             calculated at the Plan's then
                                             existing funding standard account
                                             interest rate.

                           (b)      Except as provided otherwise herein, any
                                    contributions necessary to meet the Required
                                    Credit Balance for a Plan Year shall be made
                                    in cash no later than December 31 of that
                                    Plan Year; provided, however, that nothing
                                    herein shall require contribution of the
                                    Minimum Funding Contributions or Normal Cost
                                    before the otherwise legally required due
                                    date for making Minimum Funding
                                    Contributions.

                           (c)      Subject to Section 5C(1)(b) of this
                                    Agreement, each Plan's Required Credit
                                    Balance for any Plan Year must reflect the
                                    total amount calculated under Section
                                    5(C)(1)(a) above, regardless as to whether
                                    contributions are actually paid to the Plan
                                    and regardless as to whether the actual
                                    contributions have been limited pursuant to
                                    Maximum Tax Deductible Contribution Amount.

                  (2)      Contributions in Excess of the Maximum Tax Deductible
                           Contribution Amount.

                           Notwithstanding anything in this Agreement to the
                           contrary, contributions to a Plan for any given Plan
                           Year will not be required to exceed that Plan's
                           Maximum Tax Deductible Contribution Amount. If any
                           portion of a contribution is not deductible for any
                           Plan for a Plan Year, then that portion shall not be
                           required to be contributed for the Plan Year for
                           which it is not deductible, and instead such portion
                           shall be carried over and paid in the next taxable
                           year in which it is deductible. Any such carryover

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                           payment will be in addition to any other
                           contributions required for such next Plan Year to the
                           extent deductible.

                  (3)      Determination of Minimum Funding Requirement.

                           For the purposes of this Agreement, Minimum Funding
                           Contribution may be determined utilizing the highest
                           interest rate permitted under Section 412(1)(7) of
                           the Code and, notwithstanding Section 5C(1)(a), the
                           amount of any Minimum Funding Contribution for a Plan
                           Year in excess of the Minimum Funding Contribution
                           computed in accordance with the foregoing may reduce
                           the Required Credit Balance (as computed in
                           accordance with Section 5C(1)(a)) by such excess
                           amount.

         D.       CORP'S CONSENT TO U.S. JURISDICTION:

                  Corp consents to jurisdiction in the United States federal
                  district courts with respect to its obligations under this
                  agreement with the PBGC.

         E.       CORP GUARANTY:

         (1)      Annual funding requirements. Corp will be jointly and
                  severally liable with its U.S. subsidiaries for the
                  obligations to fund the Plans in accordance with this
                  Agreement.

         (2)      Termination liability. Corp will be jointly and severally
                  liable with its U.S. subsidiaries for any liabilities owing by
                  its U.S. subsidiaries to the Plans or to the PBGC upon
                  termination of either or both of the Plans.

6.       PBGC'S OBLIGATIONS:

         A.       In consideration of the Corp Obligations, PBGC will forebear
                  from instituting proceedings to involuntarily terminate either
                  of the Plans under 29 U.S.C.Section 1342(a)(4) in advance of
                  the Corp and plc schemes of arrangement or the actions
                  contemplated thereunder.

         B.       That any contingent claim filed by PBGC in the plc scheme of
                  arrangement shall be automatically released on the Effective
                  Date. This Agreement shall not otherwise limit PBGC's rights
                  under ERISA with respect to the Plans.

7.       TERMINATION OF THE AGREEMENT:

         A.       This Agreement shall terminate in its entirety with respect to
                  the relevant Plan upon the earliest to occur of (1), (2), (3)
                  or (4) below, but, in the case of (1) or (2), no earlier than
                  five (5) years after the Effective Date.

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                  (1)      With respect to both Plans, the date on which Corp
                           obtains ratings on its outstanding unsecured debt
                           from Standard & Poor's and Moody's of at least BBB
                           and Baa2, respectively.

                  (2)      The date on which Corp demonstrates that a Plan has
                           unfunded benefit liabilities (as defined under 29
                           U.S.C. Section 1301(a)(18)) of zero as of the last
                           day of a Plan Year for two consecutive full Plan
                           Years. The first date this test can be measured is as
                           of five (5) years after the Effective Date; this test
                           and all subsequent tests would apply to the two Plan
                           Years immediately proceeding the date on which the
                           test takes place.

                  (3)      The date on which PBGC receives a Form 501 - Post
                           Distribution Certification for a Plan indicating that
                           such Plan has terminated in a Standard Termination
                           under 29 U.S.C. Section 1341(b). In addition, the
                           Agreement will cease to apply with respect to a given
                           Plan when PBGC receives a Form 501 indicating that
                           the given Plan has terminated in a Standard
                           Termination.

                  (4)      The date on which the sponsorship of a Plan is
                           assumed in its entirety by a third party purchaser in
                           a Sale in accordance with Section 5B(1) or Section
                           5B(3) of this Agreement.

         B.       Termination Notice: Corp shall provide PBGC with written
                  notice of any determination by Corp that any of the events
                  described in Section 7(A) above has occurred. Within thirty
                  (30) days of receiving such notice, PBGC will respond in
                  writing whether it concurs with Corp's determination, PBGC's
                  concurrence not to be unreasonably withheld. The Agreement
                  shall terminate on the date Corp receives PBGC's concurrence.

8.       NOTICE REQUIREMENTS:

         Corp will provide the following information to PBGC, in addition to any
         reporting obligations that the Corp Group may have under ERISA and/or
         the Code:

                           (A)      Copies to PBGC's Corporate Finance and
                  Negotiations Department of any notices otherwise required to
                  be filed with the Internal Revenue Service or PBGC concerning
                  the Plans at the time the filing is made;

                           (B)      Written notice 30 days (or such lesser
                  period as is prescribed by Section 5B(1) of this Agreement)
                  prior to any Plan merger or any transfer of liabilities or
                  assets described in Code Section 414(l), to or from any Plan
                  (other than de minimis mergers or transfers), which shall be
                  subject to PBGC's consent, which consent shall not be
                  unreasonably withheld.

                           (C)      Written notice 30 days prior to any change
                  in any of the Plans' actuarial assumptions or methods for the
                  purpose of the minimum funding

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                  standard account (other than changes required by law or
                  changes in the interest rate permitted under Section 412 of
                  the Code), which changes shall be subject to PBGC's consent,
                  which consent shall not be unreasonably withheld.

                           (D)      Written notice 30 days prior to any change
                  in any of the Plans' Plan Years. Such changes shall be subject
                  to PBGC's consent, which consent shall not be unreasonably
                  withheld.

                           (E)      Each Plan's Actuarial Valuation Report no
                  later than the last day of the Plan Year.

                           (F)      Each Plan's Form 5500, with attachments,
                  when filed.

                           (G)      By each June 30, a statement certified by
                  one or more of the Plans' enrolled actuaries, specifying the
                  following:

                                        (1)    The amount of contributions
                           necessary to maintain each Plan's Required Credit
                           Balance and details of the calculation of each Plan's
                           Required Credit Balance.

                                        (2)    A statement that the contribution
                           necessary to maintain each Plan's Required Credit
                           Balance is not limited by the Maximum Tax Deductible
                           Contribution Amount for the Plan Year, or, if the
                           contribution is limited, the statement shall contain
                           details showing the calculation of the limitation and
                           the reallocation to later Plan Years.

                           Such actuarial certification shall indicate that the
                           calculations contained therein are subject to change
                           due to any corporate transaction affecting plan
                           assets and liabilities which may occur during the
                           applicable period and which is not reasonably
                           contemplated as of the date of such statement.

                           (H)      By the last day of each Plan Year, and
                  except as provided by Section 5C(1)(b), a certification from
                  Corp that contributions at least equal to the lesser of (1) or
                  (2) below have been made to each Plan.

                                        (1)    The amount necessary to maintain
                           each Plan's Required Credit Balance.

                                        (2)    The Maximum Tax Deductible Amount
                           that may be contributed to each Plan for the Plan
                           Year.

                           (I)      A copy of Plan amendments within 10 days of
                  adoption.

                           (J)      Within 5 business days of each applicable
                  due date, written confirmation that each quarterly
                  contribution, Minimum Funding Contribution,

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                  Enhanced Contribution, or any other contribution required to
                  be made to a Plan pursuant to this Agreement was in fact,
                  contributed.

                           (K)      Notice of the Effective Date within 10 days
                  of its occurrence.

9.       GENERAL PROVISIONS:

         A.       Governing Law. Any dispute arising out of the execution or
                  interpretation of this Agreement, or any proceeding to enforce
                  this Agreement or to collect amounts due under ERISA with
                  respect to the Plans, shall be within the exclusive
                  jurisdiction of the federal courts of the United States. The
                  laws of the District of Columbia shall govern any such
                  dispute. The PBGC may bring any such action in any federal
                  court of competent jurisdiction in the District of Columbia or
                  in any other jurisdiction where any of the other parties to
                  this Agreement or any of their property may be found.

         B.       Enforceability. This Agreement may be enforced only by the
                  parties hereto. This Agreement is solely for the benefit of
                  the parties hereto and is not intended to confer upon any
                  person except the parties hereto any rights or remedies.

         C.       Amendment of Agreement. This Agreement may not be amended
                  except by an instrument in writing executed by the parties to
                  the Agreement.

         D.       Notices. All notices and other communications made pursuant to
                  this Agreement shall be in writing and shall be delivered to
                  the intended recipient at the address so specified below or at
                  such other address as shall be designated by any of them in a
                  notice to each other party set forth herein. A notice or other
                  communication will be deemed to have been given on the date
                  received, except that if received on a Saturday, Sunday or
                  federal holiday, the notice or other communication will be
                  deemed to have been given on the first day following the date
                  received that is not a Saturday, Sunday or federal holiday.

Corp or plc:               Marconi Corporation plc
                           One Bruton Street
                           London WIJ 6AQ
                           England
                           Attn:  Chief Operating Officer
                           Facsimile:  44-20-7493-1974

                           With a copy to:

                           Greensboro Associates, Inc.
                           3300 Battleground Avenue
                           Suite 301
                           Greensboro, NC  27410
                           Attn:  Vice President and General Counsel

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                           Facsimile:  (336) 545-7340

PBGC:                      Pension Benefit Guaranty Corporation
                           1200 K Street, N.W., Suite 270
                           Washington, D.C.  20005
                           Attn:  Chief Negotiator and Director,
                           Corporate Finance and Negotiations Department
                           Facsimile:  (202) 842-2643

                           With a copy to:

                           Pension Benefit Guaranty Corporation
                           1200 K Street, N.W., Suite 340
                           Washington, D.C.  20005
                           Attn:  General Counsel
                           Facsimile: (202) 326-4112

         E.       Headings. The titles and headings of the sections of this
                  Agreement are for convenience of reference only and will not
                  control or affect in any way the scope, intent or
                  interpretation of any of the provisions of this Agreement.

         F.       Counterparts. This Agreement may be executed in one or more
                  counterparts, all of which taken together shall constitute one
                  and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers as of the dates indicated.

                                                 MARCONI CORPORATION PLC

Date: 3/25/03                           by:      M. PARTON

                                                 MARCONI PLC

Date: 3/25/03                           by:      C. HOLDEN

                                                 PENSION BENEFIT GUARANTY
                                                 CORPORATION

DATE:  3/25/03                          by:      ANDREA E. SCHNEIDER

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