Herbalife.

Herbalife.

Herbalife Ltd. agreed Friday to pay $200 million and change its business model as part of a settlement that ends a two-year probe by the Federal Trade Commission. Crucially, however, the downtown-based company avoided being labeled as a pyramid scheme by federal regulators.

Herbalife’s stock was up nearly ten percent following the news.

FTC Chairwoman Edith Ramirez said the settlement would force Herbalife to change how it does business in response to the agency’s findings that the “multi-level marketing company’s compensation structure was unfair.”

“This settlement will require Herbalife to fundamentally restructure its business so that participants are rewarded for what they sell, not how many people they recruit,” Ramirez said in a statement issued Friday.

Herbalife, which also settled a probe by the Illinois attorney general for $3 million, spun the resolutions as a vote of confidence that the company was on solid ground.

“The settlements are an acknowledgment that our business model is sound and underscore our confidence in our ability to move forward successfully, otherwise we would not have agreed to the terms,” Michael O. Johnson, chairman and CEO, Herbalife, said in a statement.

Herbalife also took the opportunity to announce that it would up the ownership limit of activist investor Carl Icahn, who has backed the company in a three year proxy-war with short-selling rival Bill Ackman, from 25 to 35 percent. Icahn, who currently owns an 18 percent stake in the company, issued a statement in conjunction with Herbalife expressing continued confidence in the diet and nutrition supplement company and its leadership.

“I have the greatest confidence in Herbalife's CEO, Michael Johnson, and the entire management team, who have skillfully led the Company through adversity, including holding firm against a high-profile PR campaign against the Company by Bill Ackman where it was alleged more than once that the Company would be shut down,” the statement reads. “Obviously, we are still here.”

While the settlement requires Herbalife to make some changes, it was widely viewed as good news for the company and a repudiation of Ackman’s protracted campaign. Ackman’s allegations that the Herbalife was a pyramid scheme helped kicked off the FTC investigation and he made several high-profile bets shorting the company’s stock.

Ackman’s investment fund, Pershing Square Capital Management, issued a statement saying that while the FTC settlement does not explicitly call Herbalife’s business model a pyramid scheme, it might as well.

“While it appears that Herbalife negotiated away the words ‘pyramid scheme’ from the settlement agreement, the FTC’s findings are clear,” the statement reads. “We expect that once Herbalife’s business restructuring is fully implemented, these fundamental structural changes will cause the pyramid to collapse.”