Holmgren led a remarkable turnaround in his first full season as general manager, helping the team with the worst record in the league in 2006-07 become a Stanley Cup contender before falling in the Eastern Conference finals to the Pittsburgh Penguins earlier this year.

"I am very proud of the job that Paul has done," said team chairman Ed Snider. "He totally revamped our team and brought us back to respectability."

The Flyers went 22-48-12 in 2006-07, but Holmgren engineered an offseason makeover, signing free agent Daniel Briere and trading for Kimmo Timonen, Scott Hartnell, Joffrey Lupul and Jason Smith. Holmgren also presided over the emergence of some of the team's young talent, including 2003 first-round pick Mike Richards, who led the team with 75 points, and Jeff Carter, who recently signed to an extension to stay with the team.

Philadelphia followed the raft of offseason changes by going 42-29-11. It finished fourth in the Atlantic Division with 95 points and earning the sixth seed in the Eastern Conference playoffs. The Flyers beat the third-seeded Washington Capitals in the first round and dispatched the top-seeded Montreal Canadiens in six games before losing to Pittsburgh.

"I am positive he will continue to improve our team and to make sure that we are in contention for the Stanley Cup," Snider said.

Holmgren, who coached the Flyers from 1988 to 1992, was named interim general manager when Bob Clarke stepped down in October 2006.

The Flyers also announced the signing of free agent forward Arron Asham to a multi-year contract. Asham, originally a third-round pick by Montreal in 1996, had six goals and four assists in 77 games for the New Jersey Devils last season.