UPDATE 2-Icahn to get three more seats on Herbalife board, shares soar

(Adds background on nominees, NU Skin fine in China, updates shares,)

March 24 (Reuters) - Nutrition and weight-loss company Herbalife Ltd said it had agreed to allow three more representatives of billionaire investor Carl Icahn to join its board, sending the company's shares up as much as 9 percent before the bell.

As part of a revised agreement, Herbalife said Hunter Gary and Jesse Lynn, both Icahn employees, and James Nelson, an independent director of Icahn Enterprises, would be put up for election, giving Icahn five seats on the 13-member board.

Herbalife, whose business practices are being investigated by the U.S. Federal Trade Commission, had postponed its annual shareholders' meeting to April 29 from April 24 while it talked with Icahn about an increase in board representation.

Icahn, Herbalife's biggest shareholder with a 16.8 percent stake, has been supporting the company in its fight against fellow billionaire investor William Ackman.

Ackman, who heads Pershing Square Capital Management, has called Herbalife's distribution model a "pyramid scheme" and has run up huge losses since taking out a short position of about $1.16 billion on Herbalife's shares.

"We remain resolute in our commitment to the long term success of Herbalife," Icahn said in a statement on Monday.

Icahn continues to have the right to buy up to 25 percent of Herbalife, the statement said.

Herbalife said Carole Black, Michael Levitt and Colombe Nicholas would step down from the board.

Gary is senior vice president of Icahn Enterprises, while Lynn is assistant general counsel. Nelson has been a director on the Icahn board since June 2001.

Icahn nominees Jonathan Christodoro and Keith Cozza have been on the Herbalife board for about a year.

Herbalife, which sells most of its products through representatives rather than stores, operates in more than 80 countries.

Ackman renewed his attack on the company earlier this month when he said he had evidence the company was breaking direct-selling laws in China, its fastest-growing market.

A Chinese regulator said on Monday it had fined Herbalife rival NU Skin Enterprises Inc more than $500,000 for illegal product sales and misleading consumers - a development analysts said could also pose problems for Herbalife.

However, Herbalife has said it uses a "unique marketing program" to meet Chinese regulations.

Herbalife shares were up 7 percent at $53.00 at 0850 ET.

(Additional reporting by Mridhula Raghavan in Bangalore and Adam Jourdan in Shanghai; Editing by Savio D'Souza and Ted Kerr)