Peltz, a billionaire investor, and his Trian Group hedge fund have put forth five nominees for Heinz's 12-member board. If management and the dissidents don't resolve their differences, this fight would be the highest profile U.S. proxy contest to go to a vote this year. The company's Aug. 16 annual meeting will be in Pittsburgh, where the ketchup maker is based.

Settlement appears unlikely, as both sides have increased their vitriol in recent weeks. Trian, in a July 12 letter to Heinz shareholders, faulted the company's "dismal performance" under Chairman and CEO William Johnson. Trian, which owns a 5.5 percent stake, noted that the company's shares have fallen 38 percent since Johnson became chief executive in April 1998.

"The sad reality is," the Trian letter states, "you would have been better off financially keeping your [money] in a piggybank than investing it in Heinz stock!"

New York-based Trian has called on Heinz to undertake a series of stock buybacks, cut spending by $575 million, sell assets, and increase its dividend, according to news reports. In March, Peltz persuaded Wendy's International to install three of his board nominees after calling on the hamburger chain to improve its results and consider selling its Baja Fresh restaurants.

Heinz management has countered by questioning the independence of the Trian nominees, which include Peltz's son-in-law, Edward Garden, and Peter May, a business partner for 30 years. In a July 10 letter to shareholders, Johnson and Presiding Director Thomas Usher said the dissident nominees are "a self-interested voting bloc" that "cannot be expected to fairly represent the interests of all Heinz shareholders."

Management also points out that it "has dramatically transformed the company and delivered strong results in the last four years." Between Dec. 20, 2002, and Feb. 3, 2006, the day before Peltz became a shareholder, the company posted an 18.9 percent total shareholder return, which beat the S&P Packaged Foods peer group average of 16 percent, the management letter states.

Management has criticized Peltz and May for having to make personal payments to resolve allegations of breach of fiduciary duty and securities fraud. In response, Trian has pointed out that seven Heinz board members have named in investor lawsuits alleging breach of fiduciary duty and securities fraud.