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The extension will run through the 2010-11 season. Financial terms were not disclosed.
"John is deserving of this new contract," general manager Paul Holmgren said. "He is a very energetic coach who brings a lot of enthusiasm and passion to the game and we look forward to working together over the next few years."
Stevens originally had a 2-year contract that took him through last season. He then signed a 1-year extension in December 2007 that was to take him through the upcoming season.
Stevens, 42, who replaced the fired Ken Hitchcock on Oct. 22, 2006, took a team with the worst record in the NHL in 2006-07 to within one series win of the Stanley Cup finals.
Last season, the Flyers were 42-29-11 for 95 points to finish fourth in the Atlantic Division and sixth in the Eastern Conference. The Flyers were 39 points and 20 wins better than the previous season.
"I am very excited," Stevens said. "This is something that we talked about in the early part of the summer. We knew that it was just a matter of time before we got it done. I love being part of this organization and the direction that the team is headed."
He was named the NHL coach of the year by the Sporting News. Stevens was named an assistant to Hitchcock in June 2006, after serving as the head coach of the Phantoms for six seasons, which included a Calder Cup championship in 2005.
"He has a great relationship with our younger players, dating back to the Phantoms' Calder Cup championship, and he certainly has a great rapport with the veterans on the team," Comcast-Spectacor president Peter Luukko said. *
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