Campbell Soup Co. and activist investor Dan Loeb reached a deal Monday that will give Loeb's Third Point LLC two seats on the Camden company's board and allow Third Point input on the selection of Campbell's next chief executive and a third new director to be appointed by May.

The agreement also increases the size of the Campbell board from 12 to 14. The deal ends a months-long proxy fight between the billionaire New York hedge fund manager and billionaire heirs of the condensed-soup inventor and takes the edge off Campbell's annual meeting scheduled for Thursday in Mount Laurel.

"We are pleased to have reached an agreement with Third Point that is in the best interests of Campbell shareholders," the company's interim chief executive, Keith McLoughlin, said in a release.

Loeb also expressed confidence that Campbell will find "a world-class CEO."

A new Campbell CEO, expected by the end of the year, will face challenges that are endemic to old-line packaged food companies: declining sales of soup, breakfast cereal, and dozens of other decades-old products that are typically sold in the center aisles of supermarkets.

During a conference call last week on Campbell's earnings for the three months ended Oct. 28, Kenneth Goldman, senior analyst at J.P. Morgan Chase & Co., expressed skepticism to McLoughlin and other Campbell executives that the company had a viable ideas for reviving the soup business.

"I'm trying to figure out what is the plan to spark sustained consumer interest in the core Campbell's soup red and white can as well as Chunky" Goldman said.

McLoughlin's immediate answer did not involve soup but general mealtime problem solving: "How do you take away that 4:00 to 6:00 p.m. nightmare that happens in every household, like what's for dinner?"

The scenario that McLoughlin then described sounded similar to what Campbell already offers with its Skillet sauces, which were launched under former CEO Denise Morrison as part of a bid for millennials but have not taken the world by storm.

"Here's an easy way to take some chicken or salmon," McLoughlin said, describing a possible marketing avenue for Campbell, "and with these ingredients, with these capabilities, make a healthy meal for your family."

Christopher R. Growe, an analyst at Stifel, on Monday described the compromise with Loeb as a negative for the stock because it likely takes a break-up or sale of Campbell off the table. He also said, "The company is more likely to entertain an external candidate now that Third Point is involved in the process."

Luca Mignini, elevated in April to the position of chief operating officer and the official charged with the integration of this year's $6.1 billion Snyder's-Lance Inc. acquisition, had been considered a leading internal candidate.

Campbell's shares closed down $1.51, or 3.7 percent, to $39.02 on the New York Stock Exchange.

Loeb targeted Campbell after Morrison's abrupt departure in May after an ill-fated move into fresh food with the purchases of fresh carrot and beverage firm Bolthouse Farms in 2012 for $1.55 billion and salsa maker Garden Fresh Gourmet for $232 million in 2015.

But Loeb, who was allied with George Strawbridge Jr., a member of the controling Dorrance family, ran up against other family members, including three board members, who collectively represent 41 percent of the company's stock and were opposed to selling their stock. Because the company's charter says two-thirds of votes cast by shareholders must favor a sale, that outcome could not happen without their support.

Despite that difficult backdrop, Loeb initially sought to replace Campbell's entire 12-member board, asserting in August "that the only justifiable outcome of the strategic review" then underway was the sale of the company, which, he said, could fetch $52 to $58 per share.

After hearing from other outside investors that gaining "meaningful representation" on the board would be good for both sides, he scaled his slate down to five, before finally settling for two directors in a deal first reported Sunday by the Wall Street Journal.

The agreement calls for Campbell to expand the number of directors on its board initially to 14 from 12. The two new directors from Loeb's proposed slate are Sarah Hofstetter, president of comScore, a media and advertising data company, and Kurt Schmidt, former chief executive of Blue Buffalo Co. Ltd., a pet food manufacturer.

As part of the arrangement, Third Point agreed to drop its proxy fight for 12 months and to withdraw a lawsuit in New Jersey state court that sought more information for shareholders before they voted at Thursday's meeting.