Indiana Pacers forward Aaron Nesmith agreed to a two-year, $40.4 million contract extension with the franchise through the 2028-29 season, plus a trade kicker, agent Mike Lindeman of Excel Sports Management told ESPN on Monday night.

The Pacers gave Nesmith his maximum allowed salary ahead of Monday’s deadline for veteran extensions. The deal locks in one of Indiana’s best defenders after a playoff run in which he started all 23 games en route to the NBA Finals.

Nesmith had a breakthrough 2024-25 campaign, averaging career highs in field goal percentage (51%), 3-point percentage (43%) and free throw percentage (91%). He averaged 12 points and four rebounds in 45 regular-season games.

Nesmith was even better in the postseason as he took on top defensive assignments such as Jalen Williams, Jalen Brunson, Giannis Antetokounmpo and Darius Garland. He also shot 49.2% on 3-pointers during the playoffs, the best by any player in a single postseason with at least 100 3-point attempts in NBA history, according to ESPN Research.