Document:

<PAGE>   1

                                                                   EXHIBIT 10.21

                              SEVERANCE AGREEMENT

     This Severance Agreement is dated as of May 3, 1999, and is entered into
between United Auto Group, Inc., a Delaware corporation (the "Company"), and
Robert Nelson ("Executive").

     WHEREAS, Executive is currently employed by the Company as an executive
officer of the Company; and

     WHEREAS, Executive and the Company desire to embody in this Agreement the
terms, conditions and benefits to be provided to Executive in the event of
Executive's termination of employment with the Company following a Change in
Control (as defined below); and

     WHEREAS, This Agreement shall supersede all prior oral and written
agreements, arrangements and understandings relating to the terms and conditions
of Executive's employment termination.

     NOW, THEREFORE, the parties hereby agree:

                                   ARTICLE I

                                  DEFINITIONS

     1.1. "BOARD" shall mean the Board of Directors of the Company.

     1.2. "CAUSE" shall mean (with regard to Executive's termination of
employment with the Company): (a) Executive's conviction of a felony (other than
a traffic violation), (b) Executive's embezzlement, willful breach of fiduciary
duty or fraud with regard to the Company or any of its assets or businesses, or
(c) Executive's substantial and continuing failure to perform the material
duties of his position.

     1.3. "CHANGE IN CONTROL" shall mean the consummation of the transactions
contemplated by the "Second Purchase" as such term is defined in the Securities
Purchase Agreement, dated as of April 12, 1999, by and among the Company,
International Motor Cars Group I, L.L.C., a Delaware limited liability company,
and International Motor Cars Group II, L.L.C., a Delaware limited liability
company.

     1.4. "COMPANY" shall mean United Auto Group, Inc., a Delaware corporation,
and any successor as provided in Section 4.5 hereof.

     1.5. "GOOD REASON" shall mean (with respect to Executive's termination of
employment with the Company) Executive's voluntary termination of employment
with the Company due to: (i) a material diminution in Executive's
responsibilities or a reduction in Executive's basic annual salary from the 1999
budgeted annual salary for Executive, (ii) the elimination of Executive's
position responsibilities, or (iii) the company's requiring Executive to be
based at any office or location that is more than fifty (50) miles further from
Executive's present job location on the date hereof. No termination of
employment shall be treated as for Good Reason unless, before the termination of
his employment, Executive has given the Company thirty (30) days' notice and
opportunity to cure the action which is the basis for the assertion of Good
Reason and such notice is given not more than ninety (90) days after the action
alleged to constitute Good Reason.

     1.6. "SALARY" shall mean Executive's 1999 budgeted annual salary.

     1.7. "SEVERANCE BENEFIT" shall mean the benefit paid or provided to
Executive by the Company in accordance with Section 2.1 hereof.

     1.8. "TERMINATION DATE" shall mean May 3, 1999 and specifically excludes
any period for which a Severance Benefit is made.
<PAGE>   2

                                   ARTICLE II

                                    BENEFITS

     2.1. Change in Control Benefits. In the event that a Change in Control
occurs and Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason on and after May 3, 1999 and prior to August 2,
2000, (i) the Company shall pay to Executive all amounts and benefits that have
accrued or were earned but remain unpaid through the Termination Date in respect
of salary, bonus and unreimbursed expenses, including accrued and unused
vacation, within thirty (30) days following the Termination Date, (ii) Executive
shall continue to receive the Salary (less any applicable withholding or similar
taxes) in accordance with the Company's prevailing payroll practices for a
period of 12 months following the Termination Date (the "Severance Term"), and
(iii) all outstanding stock options in respect of Company common stock
previously granted to the Executive shall vest, to the extent unvested, and be
immediately exercisable until the scheduled date of expiration, but without
regard to the Executive's termination of employment. Anything in this Section
2.1 to contrary, the payments and benefits to be provided to the Executive as
set forth in this Section 2.1 shall be lieu of any and all benefits otherwise
provided under any severance pay policy, plan or program maintained from time to
time by the Company for its employees.

     2.2. Continuation of Benefits in the Event of Death. In the event Executive
dies prior to receipt of his entire Severance Benefit, the remaining portion of
such Severance Benefit shall continue to be paid, in the same form as described
in Section 2.1 above to Executive's spouse, or, if Executive is not married on
the date of death, to Executive's estate.

     2.3. Mitigation/Set Off. (a) Executive shall not be required to seek other
employment or to attempt in any way to reduce amounts payable to him pursuant to
this Agreement. Further, except as otherwise provided in this Section 2.3, the
amount of the Severance Benefit payable under this Agreement shall not be
reduced by any compensation earned by or other benefits provided to Executive as
a result of employment by another employer or otherwise.

     (b) Notwithstanding the foregoing provisions of this Section 2.3, the
Company's obligation to make payment of Severance Benefits and otherwise to
perform its obligations hereunder shall be reduced to the extent of any amounts
owed by Executive to the Company which relate to or arise out of Executive's
employment prior to the Termination Date.

                                  ARTICLE III

                             RESTRICTIVE COVENANTS

     3.1. Confidentiality. All material and information which is confidential to
the Company or to any of its subsidiaries or affiliates, whether tangible or
intangible, made available, disclosed or otherwise known to Executive as a
result of his employment with the Company, shall be considered the sole property
of the Company. Executive shall not disclose such material or information to
others except with the Company's prior written approval or as may otherwise be
required by law or legal process. If disclosure of material and information
which is confidential to the Company is sought by a court or administrative
agency of competent jurisdiction or an officer of the court or administrative
agency, either by subpoena or other method, Executive shall, prior to making
disclosure, immediately notify by telephone and confirm in writing to Company's
General Counsel, the circumstances requiring disclosure. The Company shall have
the opportunity, at its own expense, to respond and object (on behalf of itself
or the Executive) to the disclosure, including, but not limited to, an
opportunity to object to the court or administrative agency order, to move to
quash any subpoena, and to take such further action as may be necessary to
protect the terms of this Agreement and to limit or cause to be limited the
extent to which such disclosure shall be made.

     3.2. Nonsolicitation. During the Severance Term, Executive shall not
attempt to influence, persuade or induce, or assist any other person in so
persuading or inducing, any employee of the Company to give up, or to not
commence, employment or a business relationship with the Company.

                                        2
<PAGE>   3

     3.3. Non-Compete. Executive agrees that, during the Severance Term, except
with the prior written consent of either the Chairman of the Board or the
President of the Company, which will not be unreasonably withheld, he or she
shall not, directly or indirectly, for himself or herself or on behalf of or in
conjunction with any person, partnership, corporation or other entity, compete,
own, operate, control, or participate or engage in the ownership, management,
operation or control of, or be connected with as an officer, employee, partner,
director, shareholder, representative, consultant, independent contractor,
guarantor, advisor or in any other similar capacity or otherwise have a
financial interest in, a business organization or enterprises that competes with
the business of the Company or any of its subsidiaries and whose outstanding
capital stock or other equity interests are traded on any national stock
exchange or in the national over-the-counter market ("Public Companies"). For
purposes hereof, the Company shall be deemed to be in the business of operating
dealerships located in the United States of America or the Commonwealth of
Puerto Rico that engage in the retail sale of new or used automobiles or
light-duty trucks and businesses ancillary thereto, provided, however, that for
any business of Executive to be deemed competitive for purposes hereof, it must
be located within a fifty (50) mile radius of any automobile or truck dealership
or ancillary business in which the Company (or any subsidiary thereof), directly
or indirectly has an ownership interest of 20% or more at the time the competing
activities commence. During the Severance Period, Executive shall not interfere
with or disrupt, or attempt to interfere with or disrupt, the relationship,
contractual or otherwise, between the Company or any of its subsidiaries or
their affiliates and any customer, client, supplier, manufacturer, distributor,
consultant, independent contractor, employee or landlord of the Company or any
of its subsidiaries or their affiliates.

     Unless otherwise agreed, any request for consent under this provision that
is not acted on by the Chairman of the Board or President of the Company within
ten (10) calendar days of receipt of the request shall be deemed granted.

     Notwithstanding anything in this Subsection 3.3 to the contrary, Executive
may own, directly or indirectly, up to 1% of the outstanding capital stock or
other equity interests of any competitive business having a class of capital
stock which is traded on any national stock exchange or in the national
over-the-counter market.

                                        3
<PAGE>   4

                                   ARTICLE IV

                                 MISCELLANEOUS

     4.2. Amendment. This Agreement may not be amended without the written
consent of both parties.

     4.2. Withholding. The Company shall have the right to make such provisions
as it deems necessary or appropriate to satisfy any obligations it reasonably
believes it may have to withhold federal, state or local income or other taxes
incurred by reason of payments pursuant to this Agreement. In lieu thereof, the
Company shall have the right to withhold the amount of such taxes from any other
sums due or to become due from the Company to Executive upon such terms and
conditions as the Company may decide.

     4.3. Severability. Should any provisions of this Agreement be deemed or
held to be unlawful or invalid for any reason, such fact shall not adversely
affect the other provisions of this Agreement. Notwithstanding the above, if any
covenant set forth in Sections 3.1, 3.2 or 3.3 hereof is deemed invalid, illegal
or unenforceable because its scope is considered excessive, such covenant will
be modified so that scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable.

     4.4. Controlling Law. This Agreement shall be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
Delaware, without regard to conflicts of law principles.

     4.5. Binding on Successors. The Company shall require any successor or
assignee, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform the Company's
obligations under this Agreement, in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had
taken place.

     4.6. Effect of Agreement. This Agreement shall not be construed as creating
any contract of employment between the Company and Executive. Executive shall
not have any right to be retained in the employ or service of the Company for
any length of time by reason of this Agreement, and this Agreement shall not
affect the right of the Company to deal with Executive in all respects relating
to Executive's employment, including Executive's discharge, compensation, and
conditions of employment.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

                                                   /s/ ROBERT NELSON
                                          --------------------------------------
                                                 Robert Nelson, Executive

                                          UNITED AUTO GROUP, INC.,
                                          a Delaware corporation

                                          By:      /s/ PAUL F. WALTERS
                                            ------------------------------------
                                            Name: Paul F. Walters
                                            ------------------------------------
                                            Title: Executive Vice President
                                            ------------------------------------

                                        4<PAGE>   1

                                                                   EXHIBIT 10.22

                              SEVERANCE AGREEMENT

     This Severance Agreement is dated as of August 2, 1999, and is entered into
between United Auto Group, Inc., a Delaware corporation (the "Company"), and
James Davidson ("Executive").

     WHEREAS, Executive is currently employed by the Company as an executive
officer of the Company; and

     WHEREAS, Executive and the Company desire to embody in this Agreement the
terms, conditions and benefits to be provided to Executive in the event of
Executive's termination of employment with the Company following a Change in
Control (as defined below); and

     WHEREAS, This Agreement shall supersede all prior oral and written
agreements, arrangements and understandings relating to the terms and conditions
of Executive's employment termination.

     NOW, THEREFORE, the parties hereby agree:

                                   ARTICLE I

                                  DEFINITIONS

     1.1. "BOARD" shall mean the Board of Directors of the Company.

     1.2. "CAUSE" shall mean (with regard to Executive's termination of
employment with the Company): (a) Executive's conviction of a felony (other than
a traffic violation), (b) Executive's embezzlement, willful breach of fiduciary
duty or fraud with regard to the Company or any of its assets or businesses, or
(c) Executive's substantial and continuing failure to perform the material
duties of his position.

     1.3. "CHANGE IN CONTROL" shall mean the consummation of the transactions
contemplated by the "Second Purchase" as such term is defined in the Securities
Purchase Agreement, dated as of April 12, 1999, by and among the Company,
International Motor Cars Group I, L.L.C., a Delaware limited liability company,
and International Motor Cars Group II, L.L.C., a Delaware limited liability
company.

     1.4. "COMPANY" shall mean United Auto Group, Inc., a Delaware corporation,
and any successor as provided in Section 4.5 hereof.

     1.5. "GOOD REASON" shall mean (with respect to Executive's termination of
employment with the Company) Executive's voluntary termination of employment
with the Company due to: (i) a material diminution in Executive's
responsibilities or a reduction in Executive's basic annual salary from the 1999
budgeted annual salary for Executive, (ii) the elimination of Executive's
position responsibilities, or (iii) the company's requiring Executive to be
based at any office or location that is more than fifty (50) miles further from
Executive's present job location on the date hereof. No termination of
employment shall be treated as for Good Reason unless, before the termination of
his employment, Executive has given the Company thirty (30) days' notice and
opportunity to cure the action which is the basis for the assertion of Good
Reason and such notice is given not more than ninety (90) days after the action
alleged to constitute Good Reason.

     1.6. "SALARY" shall mean Executive's 1999 budgeted annual salary plus
$100,000.00 over an annual period.

     1.7. "SEVERANCE BENEFIT" shall mean the benefit paid or provided to
Executive by the Company in accordance with Section 2.1 hereof.

     1.8. "TERMINATION DATE" shall mean the last official work day for which
Executive receives pay for service with the Company and specifically excludes
any period for which a Severance Benefit is made.
<PAGE>   2

                                   ARTICLE II

                                    BENEFITS

     2.1. Change in Control Benefits. In the event that before expiration of the
twelve-month period immediately following a Change in Control, Executive's
employment is terminated by the Company without Cause or by the Executive for
Good Reason: (i) the Company shall pay to Executive all amounts and benefits
that have accrued or were earned but remain unpaid through the Termination Date
in respect of salary, bonus and unreimbursed expenses, including accrued and
unused vacation, within thirty (30) days following the Termination Date, (ii)
Executive shall continue to receive the Salary (less any applicable withholding
or similar taxes) in accordance with the Company's prevailing payroll practices
for a period of 18 months following the Termination Date (the "Severance Term"),
and (iii) all outstanding stock options in respect of Company common stock
previously granted to the Executive shall vest, to the extent unvested, and be
immediately exercisable until the scheduled date of expiration, but without
regard to the Executive's termination of employment. Anything in this Section
2.1 to contrary, the payments and benefits to be provided to the Executive as
set forth in this Section 2.1 shall be lieu of any and all benefits otherwise
provided under any severance pay policy, plan or program maintained from time to
time by the Company for its employees.

     2.2. Continuation of Benefits in the Event of Death. In the event Executive
dies prior to receipt of his entire Severance Benefit, the remaining portion of
such Severance Benefit shall continue to be paid, in the same form as described
in Section 2.1 above to Executive's spouse, or, if Executive is not married on
the date of death, to Executive's estate.

     2.3. Mitigation/Set Off. (a) Executive shall not be required to seek other
employment or to attempt in any way to reduce amounts payable to him pursuant to
this Agreement. Further, except as otherwise provided in this Section 2.3, the
amount of the Severance Benefit payable under this Agreement shall not be
reduced by any compensation earned by or other benefits provided to Executive as
a result of employment by another employer or otherwise.

     (b) Notwithstanding the foregoing provisions of this Section 2.3, the
Company's obligation to make payment of Severance Benefits and otherwise to
perform its obligations hereunder shall be reduced to the extent of any amounts
owed by Executive to the Company which relate to or arise out of Executive's
employment prior to the Termination Date.

                                  ARTICLE III

                             RESTRICTIVE COVENANTS

     3.1. Confidentiality. All material and information which is confidential to
the Company or to any of its subsidiaries or affiliates, whether tangible or
intangible, made available, disclosed or otherwise known to Executive as a
result of his employment with the Company, shall be considered the sole property
of the Company. Executive shall not disclose such material or information to
others except with the Company's prior written approval or as may otherwise be
required by law or legal process. If disclosure of material and information
which is confidential to the Company is sought by a court or administrative
agency of competent jurisdiction or an officer of the court or administrative
agency, either by subpoena or other method, Executive shall, prior to making
disclosure, immediately notify by telephone and confirm in writing to Company's
General Counsel, the circumstances requiring disclosure. The Company shall have
the opportunity, at its own expense, to respond and object (on behalf of itself
or the Executive) to the disclosure, including, but not limited to, an
opportunity to object to the court or administrative agency order, to move to
quash any subpoena, and to take such further action as may be necessary to
protect the terms of this Agreement and to limit or cause to be limited the
extent to which such disclosure shall be made.

     3.2. Nonsolicitation. During the Severance Term, Executive shall not
attempt to influence, persuade or induce, or assist any other person in so
persuading or inducing, any employee of the Company to give up, or to not
commence, employment or a business relationship with the Company.

                                        2
<PAGE>   3

     3.3. Non-Compete. Executive agrees that, during the Severance Term, except
with the prior written consent of either the Chairman of the Board or the
President of the Company, which will not be unreasonably withheld, he or she
shall not, directly or indirectly, for himself or herself or on behalf of or in
conjunction with any person, partnership, corporation or other entity, compete,
own, operate, control, or participate or engage in the ownership, management,
operation or control of, or be connected with as an officer, employee, partner,
director, shareholder, representative, consultant, independent contractor,
guarantor, advisor or in any other similar capacity or otherwise have a
financial interest in, a business organization or enterprises that competes with
the business of the Company or any of its subsidiaries. For purposes hereof, the
Company shall be deemed to be in the business of operating dealerships located
in the United States of America or the Commonwealth of Puerto Rico that engage
in the retail sale of new or used automobiles or light-duty trucks and
businesses ancillary thereto, provided, however, that for any business of
Executive to be deemed competitive for purposes hereof, it must be located
within a fifty (50) mile radius of any automobile or truck dealership or
ancillary business in which the Company (or any subsidiary thereof), directly or
indirectly has an ownership interest of 20% or more at the time the competing
activities commence, provided, further, however, that where Executive is
employed by or becomes a shareholder or partner or member of any business
organization that consults for or advises retail automobile dealerships, the
employment or the holding of the shareholder, partnership or membership interest
shall not be deemed competition unless Executive is or will be personally
engaged, or responsible for, providing advisory or consulting service to
entities that compete with the Company or any of its subsidiaries. During the
Severance Period, Executive shall not interfere with or disrupt, or attempt to
interfere with or disrupt, the relationship, contractual or otherwise, between
the Company or any of its subsidiaries or their affiliates and any customer,
client, supplier, manufacturer, distributor, consultant, independent contractor,
employee or landlord of the Company or any of its subsidiaries or their
affiliates.

     Unless otherwise agreed, any request for consent under this provision that
is not acted on by the Chairman of the Board or President of the Company within
ten (10) calendar days of receipt of the request shall be deemed granted.

     Notwithstanding anything in this Subsection 3.3 to the contrary, Executive
may own, directly or indirectly, up to 1% of the outstanding capital stock of
any competitive business having a class of capital stock which is traded on any
national stock exchange or in the over-the-counter market.

                                   ARTICLE IV

                                 MISCELLANEOUS

     4.1. Amendment. This Agreement may not be amended without the written
consent of both parties.

     4.2. Withholding. The Company shall have the right to make such provisions
as it deems necessary or appropriate to satisfy any obligations it reasonably
believes it may have to withhold federal, state or local income or other taxes
incurred by reason of payments pursuant to this Agreement. In lieu thereof, the
Company shall have the right to withhold the amount of such taxes from any other
sums due or to become due from the Company to Executive upon such terms and
conditions as the Company may decide.

     4.3. Severability. Should any provisions of this Agreement be deemed or
held to be unlawful or invalid for any reason, such fact shall not adversely
affect the other provisions of this Agreement. Notwithstanding the above, if any
covenant set forth in Sections 3.1, 3.2 or 3.3 hereof is deemed invalid, illegal
or unenforceable because its scope is considered excessive, such covenant will
be modified so that scope of the covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal and enforceable.

     4.4. Controlling Law. This Agreement shall be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
Delaware, without regard to conflicts of law principles.

     4.5. Binding on Successors. The Company shall require any successor or
assignee, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all the business or assets of the Company,
expressly and unconditionally to assume and agree to perform the Company's
obligations under this

                                        3
<PAGE>   4

Agreement, in the same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken place.

     4.6. Effect of Agreement. This Agreement shall not be construed as creating
any contract of employment between the Company and Executive. Executive shall
not have any right to be retained in the employ or service of the Company for
any length of time by reason of this Agreement, and this Agreement shall not
affect the right of the Company to deal with Executive in all respects relating
to Executive's employment, including Executive's discharge, compensation, and
conditions of employment.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.

                                                 /s/ JAMES R. DAVIDSON
                                          --------------------------------------
                                                James Davidson, Executive

                                          UNITED AUTO GROUP, INC.,
                                          a Delaware corporation

                                          By:      /s/ PAUL F. WALTERS
                                            ------------------------------------
                                            Name: Paul F. Walters
                                            ------------------------------------
                                            Title: Executive Vice President
                                            ------------------------------------

                                        4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]