<PAGE>   1
                                                                   EXHIBIT 10.23

March 11, 2001


Rodney O. Martin Jr.
Senior Vice Chairman
American General Corporation
2929 Allen Parkway
Houston, Texas 77019-2155

Dear Mr Martin:

          In connection with the transactions (the "Transactions") contemplated
by the Agreement and Plan of Merger, dated as of the date hereof, among
Prudential plc (the "Parent"), Holborn Delaware Partnership, Ascend Merger Corp.
and American General Corporation (the "Company") (the "Merger Agreement"),
Parent, Company and you desire to agree to certain amendments and supplements to
your current employment agreement with Company, dated as of May 1 2000 (the
"Employment Agreement"), your current Change in Control Severance Agreement with
Company, dated as of April 1, 2000 (the "Severance Agreement") and your current
Split Dollar Agreement, dated May 15, 2000, between Company and Rodney O.
Martin, Sr., as Trustee of the Martin 1996 Children's Trust Agreement dated
December 10, 1996 (the "Split Dollar Agreement"), and together with the
Employment Agreement and the Severance Agreement, the "Current Agreements"). The
terms of this letter agreement and the amendments and supplements to the Current
Agreements described herein will become effective upon, and are subject to, the
Effective Time of the Merger (as such terms are defined in the Merger Agreement)
(other than the provisions of Paragraphs 8 and 10, which shall become effective
upon your execution of this letter agreement). Unless otherwise specified,
capitalized terms used herein without definition shall have the meanings
assigned thereto in the Current Agreements.

          1. Company Position: Certain Compensation. Effective upon the
Effective Time and thereafter during the term of your employment with Company,
you will serve as President and Chief Executive Officer-Financial Services of
Company. You hereby acknowledge and agree that neither the consummation of the
Transactions (including the result that Company becomes a subsidiary of Parent)
nor any changes in your title, position, duties, responsibilities and authority
contemplated by this paragraph 1 or this letter agreement constitutes or will
constitute any of the events described in the definition of Good Reason under
any of the Current Agreements.
<PAGE>   2

          Notwithstanding any provision of the Employment Agreement to the
contrary, but subject to your continued employment with Company until the
payment or award date, as applicable, (i) your annual bonus for calendar year
2001, payable to you in calendar year 2002, shall not be less than your annual
bonus for calendar year 2000 paid to you in calendar year 2001 and prior to the
date hereof and (ii) in calendar year 2002, you will receive an annual grant of
equity based awards with respect to the ordinary shares of Parent that is at
least equal in value (determined using the Black-Scholes valuation method with
respect to options and in a manner consistent with the prior practices of
Company) to the value (as so determined) of all options, restricted shares and
Performance Awards contained in a Performance Based Restricted Stock Award with
respect to shares of Company common stock that were granted to you in calendar
year 2001 and prior to the date hereof. Company and Parent hereby acknowledge
that a breach of this paragraph shall constitute Good Reason under the
Employment Agreement.

          2. Directorship with Parent. Effective as soon as practicable
following the Effective Time and thereafter during the term of your employment
with Company, you shall serve as an executive member of the Board of Directors
of Parent (the "Parent Board"). The terms of your appointment are set out below:

          (a) Your appointment as an executive director of Parent is subject to
Parent 'Articles of Association, to be adopted upon the Closing of the
Transactions, as thereafter amended from time (the "Articles") and the Articles
will prevail in the event of any conflict between them and these terms in this
paragraph 2. The Articles require that directors submit themselves for
re-election periodically. You will be required to submit yourself for re-
election in 2003 at which time you will be nominated for re-election by the
Parent Board. If you are not re-elected, your appointment as director will
automatically terminate. Such termination will be without prejudice to your
rights under your Employment Agreement, as amended by this letter agreement.
Parent and Company hereby acknowledge that such failure to be re-elected will
constitute Good Reason under the Employment and the Severance Agreement.

          (b) During your appointment, you will be required to devote such time
to your duties as the Parent Board reasonably considers necessary. You will be
required to attend the annual general meeting of Parent, regular and emergency
Parent Board meetings, any extraordinary general meeting of Parent and to serve
on any committees of the Parent Board to which you are appointed, provided that
such requirements shall be reasonable and consistent with your Employment
Agreement. Relevant dates and details will be notified to you appropriately in
advance.

          (c) You will not receive any separate consideration in addition to
your compensation under your Current Agreements in respect of your appointment
as a director of Parent or the termination of your service as a director. Since
you will be a director of Parent, the remuneration committee of Parent will
determine any future remuneration, along with that of the other directors of
Parent, in accordance with the requirements of good corporate governance, any
codes, regulations and listing rules applicable to Parent from time to time, but
subject to the terms of your Supplemental Executive Retirement Agreement dated
as of May 1 2000 (the "Supplemental
<PAGE>   3

Executive Retirement Agreement") and your Current Agreements, as amended by this
letter agreement to the extent each is applicable.

          (d) Parent will reimburse you for all reasonable out of pocket
expenses necessarily incurred by you in carrying out your duties as director.

          (e) You will be covered by the directors' and officers' liability
insurance covering other members of the Parent Board.

          (f) As a director of Parent you will perform services for Parent and
also for any other company in the Parent Group (the Parent Group in this letter
agreement means Parent and any subsidiary of Parent (with subsidiary having the
meaning given by section 736 Companies Act 1985)), but only to the extent such
duties are consistent with your Employment Agreement, and you must act in the
best interests of Parent.

          (g) You will comply with the provisions of the UK Listing Authority's
Model Code for Securities Transactions by Directors of Listed Companies and
rules and regulations laid down by Parent from time to time in relation to such
matters. A copy of Parent' Guidance Notes for Directors is attached.

          You acknowledge and agree that the timing of the grant and exercise of
any options to purchase ordinary shares of Parent held by you (including any
such options you receive upon conversion of your existing Company options in
connection with the consummation of the transactions) will be subject to the UK
Listing Authority's Model Code and to any internal rules and policies of Parent.

          (h) In view of the sensitive and confidential nature of Parent
business you agree that for so long as you are a director of Parent you will
not, without the prior written consent of the Chairman and Chief Executive
Officer of the Parent Board, which shall not be withheld unreasonably, be
engaged or interested in any capacity in any business or with any company which
is, in the reasonable opinion of the Chairman and Chief Executive Officer of the
Parent Group, competitive with the business of any company in the Parent Group.
The ownership of up to one percent (1%) of any class of the outstanding
securities of any corporation (or equivalent ownership of another business
entity) shall not constitute an interest in such corporation or business entity
which violates the immediately preceding sentence.

          (i) You agree that you will not make use of, divulge or communicate to
any person (save in the proper performance of your duties or as required by
applicable law or any court or governmental authority having jurisdiction) any
of the trade secrets or other confidential information of or relating to any
company in the Parent Group which you have received or obtained. This
restriction shall continue to apply after the termination of your appointment as
director of Parent without limit in point of time but shall cease to apply to
information or knowledge which comes into the public domain otherwise than
through your default or which shall have been received by you from a third party
entitled to disclose the same to you.
<PAGE>   4

          (j) Upon notice of termination of your employment with Company,
howsoever arising and whether or not any dispute exists concerning the
termination, you shall forthwith or upon request of Parent, resign from office
as a director of Parent and all other offices held by you in any other companies
in the Parent Group. You will also resign any membership of any organization to
which you are appointed by virtue of your position in any company in the Parent
Group. Should you fail to do so, Parent is hereby irrevocably authorized to
appoint some person in your name and on your behalf to sign any documents and do
anything necessary or requisite to give effect thereto. Any such resignation
shall not prejudice your rights under the Employment Agreement and the Severance
Agreement, as amended by this letter agreement.

          (k) You agree that upon termination of your employment with Company or
upon termination of your appointment as a director of Parent, you will
immediately deliver to Parent all property belonging to Parent or any member of
the Parent Group (other than as provided in the Employment Agreement) including
all documents or other records made or compiled or acquired by you during your
appointment concerning the business, finances or affairs of the Parent Group
(other than any documents or other records relating to your employment under the
Employment Agreement or relating to the other Current Agreements or to the
Supplemental Executive Retirement Agreement).

          3. Closing of the Transactions Constitutes a Change in Control.
Company and Parent hereby acknowledge and agree that the Closing of the
Transactions will constitute a "Change in Control" within the meaning of the
Current Agreements and, accordingly, in the event of the termination of your
employment (a "Qualifying Termination") at any time during the 36 month period
following the Effective Time (x) by the Company without Cause (other than any
such termination due to your death or Disability) or (y) by you for Good Reason
(the Existence of Cause, Disability and Good Reason to be determined in
accordance with the definitions thereof contained in the Current Agreements as
modified pursuant to Paragraphs 1, 2, 4, 5, 6 and 9 of this letter agreement),
you will be entitled to the payments and benefits provided for under the terms
of the Current Agreements in the event of a Qualifying Termination (the "Change
in Control Severance Benefits").

          4.   Modification to Definition of Good Reason in Connection with
Transactions.

          (a)  You hereby agree that the definition of Good Reason in the
               Current Agreements is hereby amended, effective as of the
               Effective Time, as follows:

          (i)  by replacing the entire text of each of Section 1.12.1 of the
               Severance Agreement, Section 22(m)(I) of the Employment
               Agreement and Section 21(m)(Y)(i) of the Employment Agreement
               with the following:

          "the removal of the Executive from the Parent Board or the failure of
          Executive to be re-elected to serve as a director of the Parent Board
          or the assignment of duties or responsibilities to the Executive which
          are inconsistent with his position as an executive director of the
          Parent Board
<PAGE>   5
         or any breach of the first sentence or the last paragraph of Section 1
         of the letter agreement between the Executive and Parent, dated as of
         March 11, 2001,"

provided, however, the changes made in this Paragraph 4(a) to the terms of
Section 1.12.1 of the Severance Agreement, Section 22(m)(I) of the Employment
Agreement and Section 21(m)(Y)(I) of the Employment Agreement shall not be
effective and the terms of each of Section 1.12.1 of the Severance Agreement,
Section 22(m)(I) of the Employment Agreement and Section 21(m)(Y)(i) of the
Employment Agreement as in effect on the date hereof shall again become
effective in the event of a "change in control" of Parent or a "change in
control" of Company (as each such phrase is defined in Section 6.18(l) of the
Company Disclosure Letter to the Merger Agreement) occurring at any time during
the three year period immediately following the Effective Time ( a "Post-
Transaction Change in Control").

        (ii) by deleting the entire text of Section 22(m)(Y)(ii) of the
Employment Agreement and renumbering clauses (iii) and (iv) of such Section
22(m)(Y) as clauses (ii) and (iii), respectively.

        (b) You hereby acknowledge and agree that, notwithstanding the
provisions of Section 1.12.5 of the Severance Agreement, Section 5 of the
Employment Agreement and Sections 21(m)(Y)(ii) and 21(m)(Y)(iii) of the
Employment Agreement (as redesignated as provided above), if, at any time in the
future (other than any time following a Post-Transaction Change in Control),
your principal place of employment is relocated to New York (with or without
designation by the Chief Executive Officer) such relocation will not constitute
Good Reason under the Severance Agreement or the Employment Agreement.

        5. Modification of notice period. You hereby agree that the second
sentence of Section 7(d)(ii) of the Employment Agreement is hereby replaced,
effective as of the Effective Time, as follows: "In the event of such a
termination, the Executive shall comply with any reasonable request of the
Company to assist in providing for an orderly transition of authority, but such
assistance shall not delay the Executive's termination of employment longer than
twelve months (or, in the case of any such termination by the Executive
following a 'change in control' of Parent or a 'change in control' of Company
(as each such phrase is defined in Section 6.18(1) of the Company Disclosure
Letter to the Agreement and Plan of Merger, dated as of March 11, 2001, among
Parent, Merger Sub and Company) occurring at any time during the three year
period immediately following the Effective Time, (a "Post-Transaction Change in
Control") six months) beyond the Executive's Notice of Termination." During any
transition period permitted by reason of the amendment set forth in this
Paragraph 5, the Executive shall receive the same compensation and benefits
required to be provided to him under the Employment Agreement immediately prior
to the giving of the Executive's Notice of Termination.

        6. Modification of Non-competition restrictions. You hereby agree that,
effective as of the Effective Time, the phrase "or occurs after a Change in
Control" in the second section of Section 13(a) of the Employment Agreement is
<PAGE>   6
hereby replaced by the phrase "or occurs following a Post-Transaction Change in
Control".

          7.   Performance Based Plan for Executive Officers. You hereby
acknowledge and agree that the Transactions will not constitute a "Change in
Control" for the purposes of Section 10 of the Company Performance-Based Plan
for Executive Officers.

          8. Affiliate Letter. You hereby agree to execute and deliver to
Company and Parent, promptly upon request, an "affiliate" letter acknowledging
that you are an "affiliate" of Company and agreeing to comply with the transfer
restrictions and other provisions of the Securities Act of 1933, as amended,
applicable to affiliates, including, without limitation, Rule 145 promulgated
under such Act.

          9. Grants of Re-Load Options. You hereby acknowledge and agree that
neither the termination of the provisions contained in your options to purchase
shares of common stock of Company pursuant to which you are granted "re-load
options" in connection with certain exercises of such Company options in
accordance with the Merger Agreement nor the fact that any options to purchase
ordinary shares of Parent that may be granted to you at or after the Effective
Time do not contain any provision for re-load options will constitute Good
Reason for any purpose of the Current Agreements.

          10. Sale of Parent Shares. You hereby agree that you will not sell or
otherwise transfer or dispose of any shares of Company common stock prior to the
Closing (or the date on which the Merger Agreement is terminated, if earlier),
including any such shares acquired upon the exercise of any options to purchase
shares of Company common stock "Company Options") and any restricted shares of
Company common stock, provided that in the even that any such restricted shares
of common stock become vested prior to the Effective Time, you shall be
permitted to sell that number of shares of Company common stock having an
aggregate sales price equal to the Tax Liability incurred by you and currently
due in connection with the vesting of such restricted shares.

     "Parent Covered Shares" shall mean all such ordinary shares of Parent (i)
received by you in the Transaction sin exchange for those shares of Company
common stock (the "Restricted Company Shares") which were subject to forfeiture
restrictions which lapsed immediately prior to the Effective Time (including
ordinary shares received in exchange for restricted shares of Company common
stock and shares of Company common stock represented by the Performance Award
portion of a Performance Based Restricted Stock Award which accompanied the
grant of restricted shares) and (ii) to be issued or transferred to you upon
exercise of options for ordinary shares of Parent acquired by you pursuant to
the Merger Agreement upon the conversion of those Company Options (the
"Accelerated Company Options") which became vested and exercisable immediately
prior to the Effective Time. "Parent Tax Shares" shall mean, with respect to the
Tax Liability (as defined below) the aggregate number of ordinary shares of
Parent having an aggregate sales price (net of commissions) immediately prior to
the time a portion of the Tax Liability becomes due and payable which is equal
to such portion of the Tax Liability.
<PAGE>   7
"Tax Liability" shall mean the actual income and employment tax liability
incurred by you in connection with the vesting (immediately prior to the
Effective Time) of the Restricted Company Shares.

     You hereby agree that you will not sell or otherwise transfer or dispose of
any Parent Covered Shares during the three year period immediately following the
Effective Time, provided that (i) you may sell up to one-third (the "Permitted
Proportion") of the Parent Covered Shares during each of the first, second and
third twelve month periods immediately following the Effective Time provided
that to the extent you do not sell any or all of the Permitted Proportion of the
Parent Covered Shares in such twelve month period, you may sell a number of
Parent Covered Shares equal to the part of the Permitted Proportion not sold in
the previous twelve month period or twelve month periods in the next succeeding
twelve month period or twelve month periods, and (ii) during a reasonable period
(not to exceed 60 days) on or after the date an income tax portion of the Tax
Liability in respect of any Parent Covered Shares received in exchange for
Restricted Company Shares becomes due and payable, you may sell a number of
Parent Tax Shares having an aggregate sales price (net of commissions) at such
time equal to such due and payable income tax portion of the Tax Liability in
respect of such Ranger Cover Shares; and (iii) you may transfer Parent Covered
Shares and, if permitted by the terms of any option to which Parent Covered
Shares are subject, you may transfer such an option to your spouse, children or
grandchildren (including adopted children, step children and grandchildren
("Immediate Family"), to a trust solely for the benefit of you and your
Immediate Family, to a partnership or limited liability company whose only
partners or shareholders are, and remain, you and members of your Immediate
Family or to a charitable foundation established by you subject to such
transferee entering into an agreement in such form as Parent shall require by
which the transferee agrees to be bound by the same restrictions on sale,
transfer or disposal as apply to you by virtue of this paragraph 10.
Notwithstanding the foregoing provisions of this paragraph 10, all restrictions
on the sale, transfer or disposal of Parent Covered Shares shall immediately
lapse upon the earlier of (i) any termination of your employment on or after the
Effective Time due to your death or Disability or by Company without Cause or by
you for Good Reason (as such term is defined in the Employment Agreement and the
Severance Agreement as modified by the terms of this letter agreement) and (ii)
a Post-Transaction Change in Control.

     Without limiting the generality of the foregoing, and for the avoidance of
doubt, (i) any ordinary shares of Parent (A) received by you in the Transactions
or (B) otherwise acquired by you before or after the Transactions other than in
exchange for the Restricted Company Shares or upon exercise of the converted
Accelerated Company Options shall not be Ranger Covered Shares and shall not be
subject to any of the resale restrictions set forth in this letter agreement and
(ii) prior to the Effective Time, you shall have the right to elect to have
Company satisfy the portion of any Tax Liability required to be withheld by
Company related to the lapsing of the restrictions on any or all of the
Restricted Company Shares to be satisfied by directed Company to withhold
payment and transfer of the number of Restricted Company Shares having a value
equal to such portion of the Tax Liability.

<PAGE>   8
        11. Grant of New Option Over Parent Shares. Parent hereby agrees that it
will grant you an option to acquire the greatest number of whole ordinary shares
in Parent ("Parent Shares") that is equal to, but not in excess of, the product
of (i) the number of Parent Shares having a value, based on the closing middle
market quotation of a Parent Share on the date on which the Effective Time
occurs, that is equal to the Tax Liability and (ii) 1.75. Parent will grant the
option within 15 days after the Effective Time or, if Parent is then prohibited
by virtue of any code, regulation, listing rule or law from granting the option,
within 15 days of the date when it ceases to be so prohibited. The exercise
price per Parent Share payable upon exercise of the option will be equal to the
closing middle market quotation of a Parent Share on the date the option is
granted.

      The term of the option will be ten years. The option will be exercisable
only on or after the third anniversary of the Effective Time. The option will
not be exercisable unless you have remained in employment with Company until
such date, provided that if, prior to such date, you die or your employment
terminates due to your Disability or you terminate your employment under the
Employment Agreement for Good Reason (as such term is defined in the Employment
Agreement, as modified by the terms of this letter agreement) or Company
terminates such employment without Cause you will be entitled to exercise the
option on or after the third anniversary of grant until the tenth anniversary of
grant. If your employment terminates for any other reason the option will lapse
and be cancelled immediately upon such termination.


        12. Vesting of Parent Equity Awards. In the event of a Post-Transaction
Change in Control, all then outstanding options and other equity awards with
respect to Parent Shares previously granted to you will become fully vested and
any transfer or forfeiture restrictions applicable thereto will lapse, in each
case, effective upon consummation of the transaction constituting the Post-
Transaction Change in Control.

        13. Miscellaneous. The terms of the Current Agreements are hereby
confirmed except to the extent specifically modified by the terms of this letter
agreement. Notwithstanding any other provision of this letter agreement, upon
any termination of your employment before the Effective Time due to your death
or Disability, this letter agreement shall terminate and shall be deemed null,
void and of no effect ab initio. In accordance with Section 15 of the Employment
Agreement Parent shall require the surviving Corporation (as defined in the
Merger Agreement) to assume and agree to perform the Employment Agreement, as
amended by this letter agreement, in the same manner and to the same extent that
Company would be required to perform it if the Transactions had not taken place.

        14. Governing Law. The terms of this letter agreement shall be governed
by the laws of the State of Texas save that your service on the Parent Board as
provided in paragraph 2 and the grant of new options over Parent Shares in
paragraph 11 shall be governed by the laws of England and Wales.

                                      * * *

<PAGE>   9
      To evidence and confirm your agreement to all of the terms and conditions
set forth in this letter agreement, please execute the enclosed copy of this
letter agreement in the space provided below and return the executed copy to the
Company Secretary of Parent.




SIGNED as a DEED AND )
DELIVERED by         ) /s/ RODNEY O. MARTIN JR.
RODNEY O MARTIN JR.  )
In the presence of:  )



SIGNED by            )
                     ) /s/ MARK S. BERG
For and on behalf of )
AMERICAN GENERAL     )
CORPORATION          )



SIGNED by            )
                     ) /s/ JONATHAN W. BLOOMER
For and on behalf of )
PRUDENTIAL PLC       )