CHICAGO - Exelon Corp., Peco Energy's parent company, said today that it will lay off 500 employees and incur a $40 million severance charge in the second quarter, both part of a massive restructuring plan designed to cut costs.

The company - which runs the utilities ComEd in Chicago, as well as Peco - also plans to cut operations and maintenance spending by 3.5 percent in 2009, a move expected to save about $350 million.

"The aggressive steps we are announcing today will enable Exelon to continue to perform at a very high level," Chairman and CEO John W. Rowe said in a statement. "Eliminating even a single job is painful, but we must reduce the size of our employee team in order to achieve the leaner and more-efficient organizational structure required by today's difficult economic and business circumstances."

Most of the cuts will come from support positions at its Chicago headquarters, Exelon said. The company has roughly 17,000 employees.

The company also announced a new executive team, and plans to freeze executive salaries and limit annual and long-term incentive compensation.

Meanwhile, Exelon said yesterday it is urging NRG stockholders to vote at their Aug. 21 annual meeting in favor of proposals to replace NRG's board of directors with nine new members.

Exelon is attempting to take over Princeton, N.J.-based NRG Energy in a $5 billion deal that would create the nation's largest power generator. NRG has resisted Exelon's overtures, saying the offer undervalues the company.

Exelon shares fell 38 cents to $47.26 in morning trading.