UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.     )

Filed by Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

BOSTON PROPERTIES, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

April 1, 2011

March 30, 2012

Dear Stockholder:

You are cordially invited to attend the 20112012 annual meeting of stockholders of Boston Properties, Inc. The annual meeting will be held on Tuesday, May 17, 201115, 2012 at 10:00 a.m., Eastern Time, at 601 Lexington399 Park Avenue, 14th13th Floor, New York, New York.

The proxy statement, with the accompanying formal notice of the meeting, describes the matters expected to be acted upon at the meeting. We urge you to review these materials carefully and to use this opportunity to take part in the affairs of Boston Properties by voting on the matters described in the proxy statement. Following the formal portion of the meeting, we will report on the operations of our company and our directors and management team will be available to answer appropriate questions from stockholders.

We are pleased to inform you that we are again taking advantage of the Securities and Exchange Commission’s rules that allow companies to furnish proxy materials to their stockholders via the Internet rather than in paper form. Accordingly, we are sending most of our stockholders a notice regarding the availability of the proxy statement and our annual report via the Internet. We believe these rules will expedite your receipt of proxy materials, help conserve natural resources and reduce our printing and mailing costs.

Your vote is important. We hope that you will be able to attend the meeting. Whether or not you plan to attend the meeting, please vote as soon as possible. Instructions on how to vote are contained in the proxy statement.

Thank you for your continued support of Boston Properties.

Sincerely,

Mortimer B. Zuckerman

Chairman of the Board & Chief Executive Officer

BOSTON PROPERTIES, INC.

800 Boylston Street

Suite 1900

Boston, MA 02199-8103

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 17, 201115, 2012

The 20112012 annual meeting of stockholders of Boston Properties, Inc. will be held on Tuesday, May 17, 201115, 2012 at 10:00 a.m., Eastern Time, at 601 Lexington399 Park Avenue, 14th13th Floor, New York, New York, for the following purposes:

You may vote if you were a stockholder of record as of the close of business on March 23, 2011.21, 2012. If you do not plan to attend the meeting and vote your shares of common stock in person, we urge you to vote your shares as instructed in the proxy statement. If you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the postage-paid envelope provided.

If your shares of common stock are held by a broker, bank or other nominee, please follow the instructions you receive from your broker, bank or other nominee to have your shares of common stock voted.

Any proxy may be revoked at any time prior to its exercise at the annual meeting.

By Order of the Board of Directors

FRANK D. BURT, ESQ.

Secretary

April 1, 2011March 30, 2012

Important Notice Regarding the Availability of Proxy Materials for

the Stockholders Meeting to be Held on May 17, 201115, 2012

The proxy statement and our 20102011 annual report to stockholders are available at

www.edocumentview.com/bxp.bxp

PROXY STATEMENT

TABLE OF CONTENTS

i

ii

April 1, 2011March 30, 2012

BOSTON PROPERTIES, INC.

800 Boylston Street

Suite 1900

Boston, MA 02199-8103

PROXY STATEMENT

This proxy statement is being made available to stockholders of Boston Properties, Inc. (“we,” “us,” “our,” “Boston Properties” or the “Company”) on or about April 1, 2011March 30, 2012 via the Internet or by delivering printed copies by mail, and is furnished in connection with the solicitation of proxies by the Board of Directors of Boston Properties, Inc. for use at the 20112012 annual meeting of stockholders of Boston Properties, Inc. to be held on Tuesday, May 17, 201115, 2012 at 10:00 a.m., Eastern Time, at 601 Lexington399 Park Avenue, 14th13th Floor, New York, New York, and at any adjournments or postponements thereof.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?

As permitted by rules adopted by the Securities and Exchange Commission (“SEC”), we are making this proxy statement and our 20102011 annual report, including a copy of our annual report on Form 10-K and financial statements for the year ended December 31, 2010,2011, available to our stockholders electronically via the Internet. On or about April 1, 2011,March 30, 2012, we began mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this proxy statement and our annual report online, as well as instructions on how to vote. Also on or about April 1, 2011,March 30, 2012, we began mailing printed copies of these proxy materials to stockholders that have requested printed copies. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy. Instead, the Notice instructs you on how to access and review all of the important information contained in the proxy statement and annual report. The Notice also instructs you on how you may vote via the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice. Our 20102011 annual report is not part of the proxy solicitation material.

What is the purpose of the annual meeting?

At the annual meeting, stockholders will be asked to vote upon the matters set forth in the accompanying notice of annual meeting, including the election of directors, an advisory resolution on named executive officer compensation, the frequencyapproval of holding an advisory stockholder vote on named executive officer compensation,the 2012 Stock Option and Incentive Plan and the ratification of the appointment of our independent registered public accounting firm and, if properly presented, a stockholder proposal.firm.

Who is entitled to vote?

If you were a stockholder of record as of the close of business on March 23, 2011,21, 2012, which is referred to in this proxy statement as the “record date,” you are entitled to receive notice of the annual meeting and to vote the

shares of common stock that you held as of the close of business on the record date. Each stockholder is entitled to one vote for each share of common stock held by such stockholder on the record date.

May I attend the meeting?

All stockholders of record of shares of common stock of Boston Properties, Inc. at the close of business on the record date, or their designated proxies, are authorized to attend the annual meeting. Each stockholder and proxy will be asked to present a valid government-issued photo identification, such as a driver’s license or passport, before being admitted. If you are not a stockholder of record but you hold your shares in “street name,” you should provide proof of beneficial ownership as of the record date, such as an account statement reflecting your stock ownership as of the record date, a copy of the voting instruction card provided by your broker, bank or other nominee, or other similar evidence of ownership. We reserve the right to determine the validity of any purported proof of beneficial ownership. If you do not have proof of ownership, you may not be admitted to the annual meeting. Cameras, recording devices and other electronic devices will not be permitted, and attendees may be subject to security inspections and other security precautions. You may obtain directions to the annual meeting on our website at http://www.bostonproperties.com/proxy.

What constitutes a quorum?

The presence, in person or by proxy, of holders of at least a majority of the total number of outstanding shares of common stock entitled to vote is necessary to constitute a quorum for the transaction of business at the annual meeting. As of the record date, there were 145,050,744148,963,029 shares of common stock outstanding and entitled to vote at the annual meeting. Each share of common stock outstanding on the record date is entitled to one vote on each matter properly submitted at the annual meeting and, with respect to the election of directors, one vote for each director to be elected. Abstentions or “broker non-votes” (i.e., shares represented at the meeting held by brokers, as to which instructions have not been received from the beneficial owners or persons entitled to vote such shares and with respect to which, on one or more but not all matters, the broker does not have discretionary voting power to vote such shares) will be counted for purposes of determining whether a quorum is present for the transaction of business at the annual meeting.

How do I vote?

Voting in Person at the Meeting.    If you are a stockholder of record and attend the annual meeting, you may vote in person at the meeting. If your shares of common stock are held in street name and you wish to vote in person at the meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of common stock of record.

Voting by Proxy for Shares Registered Directly in the Name of the Stockholder.    If you hold your shares of common stock in your own name as a holder of record with our transfer agent, Computershare Trust Company, N.A., you may instruct the proxy holders named in the proxy card how to vote your shares of common stock in one of the following ways:

in hand. You will receive a series of voice instructions that will allow you to vote your shares of common stock. You will also be given the opportunity to confirm that your instructions have been properly recorded. If you did not receive printed materials and would like to vote by telephone, you must request printed copies of the proxy materials by following the instructions on your Notice.If you vote by telephone, you do not need to return your proxy cardcard..

Voting by Proxy for Shares Registered in Street Name.    If your shares of common stock are held in street name, you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares of common stock voted.

Will other matters be voted on at the annual meeting?

We are not currently aware of any other matters to be presented at the annual meeting other than those described in this proxy statement. If any other matters not described in the proxy statement are properly presented at the meeting, any proxies received by us will be voted in the discretion of the proxy holders.

May I revoke my proxy instructions?

You may revoke your proxy at any time before it has been exercised by:

If you are a stockholder of record as of the record date attending the annual meeting you may vote in person whether or not a proxy has been previously given, but your presence (without further action) at the annual meeting will not constitute revocation of a previously given proxy.

What is householding?

If you and other residents at your mailing address own shares of common stock in street name, your broker, bank or other nominee may have sent you a notice that your household will receive only one annual report, Notice of Internet Availability of Proxy Materials, notice of annual meeting and/or proxy statement. This procedure, known as “householding,” is intended to reduce the volume of duplicate information stockholders receive and also reduce our printing and postage costs. Under applicable law, if you consented or were deemed to have consented, your broker, bank or other nominee may send one copy of our annual report, Notice of Internet Availability of Proxy Materials, notice of annual meeting and/or proxy statement to your address for all residents that own shares of common stock in street name. If you wish to revoke your consent to householding, you must contact your broker, bank or other nominee. If you are receiving multiple copies of our annual report, Notice of Internet Availability of Proxy Materials, notice of annual meeting and/or proxy statement, you may be able to request householding by contacting your broker, bank or other nominee.

If you wish to request extra copies free of charge of our annual report or proxy statement, please send your request to Investor Relations, Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, Massachusetts 02199-8103; call us with your request at (617) 236-3322; or visit our website at http://www.bostonproperties.com.

How can I access Boston Properties’ proxy materials electronically?

This proxy statement and our 20102011 annual report are available at http://www.edocumentview.com/bxp. Instead of receiving copies of our future annual reports, proxy statements, proxy cards and, when applicable, Notices of Internet Availability of Proxy Materials, by mail, we encourage you to elect to receive an email that will provide electronic links to our proxy materials and also will give you an electronic link to the proxy voting site. Choosing to receive your future proxy materials online will save us the cost of producing and mailing the proxy materials or Notices of Internet Availability of Proxy Materials to you and help conserve natural resources. You may sign up for electronic delivery by visiting http://www.bostonproperties.com/proxy.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

The Board of Directors and its Committees

Board of Directors.    Boston Properties is currently governed by a ten member Board of Directors, which is divided into three classes (Class I, Class II and Class III). OurDirectors. The current members of our Board of Directors is currently comprised of three Class I directors (Mortimerare Mortimer B. Zuckerman, Carol B. Einiger and Dr. Jacob A. Frenkel), four Class II directors (LawrenceLawrence S. Bacow, Zoë Baird Alan J. Patricof and Martin Turchin) and three Class III directors (DouglasBudinger, Carol B. Einiger, Dr. Jacob A. Frenkel, Douglas T. Linde, Matthew J. Lustig, Alan J. Patricof, Martin Turchin and David A. Twardock).Twardock. Mr. Lustig was appointed to our Board of Directors on January 20, 2011 to fill the vacancy resulting from the resignation of Frederick J. Iseman on October 8, 2010. The Nominating and Corporate Governance Committee oversaw the search process for a new director and collaborated with other non-employee directors and the Chairman of the Board in identifying and recommending Mr. Lustig to our Board of Directors. In connection with Mr. Lustig’s appointment to our Board, Boston Properties and Mr. Lustig entered into an agreement pursuant to which Boston Properties agreed that, generally, Mr. Lustig may retain for his own benefit any external business opportunities that are presented to him following his appointment to our Board, other than opportunities that are expressly offered to him in his capacity as a director of Boston Properties. Mr. Richard E. Salomon decided not to stand for reelection to our Board of Directors at the 2010 annual meeting of stockholders and retired from our Board of Directors effective May 18, 2010. As a result of Mr. Salomon’s decision not to stand for reelection the size of the Board was reduced to ten members.

At the 2010 annual meeting of stockholders, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation that provides for the annual election of directors. As a result, commencing with the class of directors standing for electionelected at the 2011 annual meeting of stockholders directors will stand for election for one-year terms expiring atand the next succeeding annual meetingclass of stockholders. The directors who were elected at the 2009 annual meeting of stockholders, whose terms will expire inat the 2012 annual meeting of stockholders, will stand for election for one-year terms expiring at the 2013 annual meeting of stockholders. The class of directors who were elected at the 2010 annual meeting of stockholders, whose terms will expire in 2013, and any directors appointed by our Board of Directors to fill a vacancy prior to the 2011 annual meeting of stockholders will hold office until the end of their terms. In all cases, each director will hold office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. Any director appointed to our Board of Directors to fill a vacancy following the 2011 annual meeting of stockholders will hold office for a term expiring at the next annual meeting of stockholders following such appointment.

Leadership Structure.    Currently, Mr. Zuckerman serves as the Chairman of the Board of Directors and Chief Executive Officer of Boston Properties, and we do not have a lead independent director. Mr. Zuckerman co-founded Boston Properties in 1970 and has served as the Chairman of the Board since our initial public offering in June 1997. From June 1997 through January 2010, Edward H. Linde, a co-founder of Boston Properties, served as Chief Executive Officer. Following the passing of Mr. E. Linde on January 10, 2010, Mr. Zuckerman assumed the duties of Chief Executive Officer. OurIn this regard, the Board of Directors does not believe thatand its committees have been and continue to be engaged in succession planning, and may in the future separate the roles of Chairman and Chief Executive Officer must be combined, as evidenced by Mr. E. Linde’s previous service as Chief Executive Officer, and may in the future separate these roles.Officer. However, at this time, our Board of Directors believes that Boston Properties and our stockholders are best served by having Mr. Zuckerman serve as Chairman and Chief Executive Officer.

Mr. Zuckerman’s 4142 years of experience leading Boston Properties and significant ownership interest in Boston Properties uniquely qualify him to serve as both Chairman and Chief Executive Officer. In addition, our Board of Directors believes that Mr. Zuckerman’s combined role as an executive officer and the Chairman of our Board of Directors promotes unified leadership and direction for our Board of Directors and executive management, and it allows for a single, clear focus for the chain of command to execute our strategic initiatives and business plans.

Boston Properties does not have a lead independent director. Our Board of Directors encourages strong communication among all of our independent directors and the Chairman and believes that it is currently best served without designating a single lead independent director. Our Board of Directors believes that it is able to effectively provide independent oversight of Boston Properties’ business and affairs, including risks facing Boston Properties, without an independent Chairman or a lead independent director through the composition of our Board of Directors, the strong leadership of the independent directors and the independent committees of our Board of Directors, and the other corporate governance structures and processes already in place. Eight of the ten current members of our Board of Directors are non-management directors and seven of these directors arewho qualify as independent under the New York Stock Exchange Corporate Governance Rules, or the NYSE Rules. All of our directors are free to suggest the inclusion of items on the agenda for meetings of our Board of Directors or raise subjects that are not on the agenda for that meeting. In addition, our Board of Directors and each committee have complete and open access to any member of management and the authority to retain independent legal, financial and other advisors as they deem appropriate without consulting or obtaining the approval of any member of management. Our Board of Directors also holds regularly scheduled executive sessions of only non-management directors in order to promote discussion among the non-management directors and assure independent oversight of management. Moreover, our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, all of which are comprised entirely of independent directors, also perform oversight functions independent of management.

In addition, in determining the appropriate leadership structure of our Board of Directors, our Board of Directors considered the results of the vote on the stockholder proposal submitted to our stockholders at last year’sthe 2010 annual meeting of stockholders regarding the adoption of a policy requiring the Chairman of the Board of Directors to be an independent director who has not previously served as an executive officer of Boston Properties. Our stockholders considered and rejected thisThe proposal at the 2010 annual meeting of stockholders, with approximately 60% of the votes cast against the proposal.was not approved by our stockholders.

Director Independence.    Under the NYSE Rules, a majority of the Board of Directors must qualify as “independent directors.” To qualify as an “independent director,” the Board of Directors must affirmatively determine that the director has no material relationship with us (either directly or as a partner, shareholder or officer of an organization that has a relationship with us). Our Board of Directors established categorical standards to assist it in making the required independence determinations.

Under these categorical standards, any relationship with us shall be deemed not material if:

(b)

a director being an executive officer of, or owning, or having owned, of record or beneficially in excess of a ten percent (10%) equity interest in, any business or professional entity to which we havethe Company, an executive officer of the Company or an entity controlled by an executive officer of the Company has made during any of such fiscal years, or proposeproposes to make during ourthe Company’s current fiscal year, payments for property or services in excess of five percent

(5%) of: (i) ourthe Company’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, ourits last fiscal year), or (ii) the other entity’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, its last fiscal year);.

For purposes of these standards, “immediate family” member has the same meaning as in the NYSE Disqualifying Rules.

Relationships not specifically deemed not material by the above categorical standards may, in the Board’s judgment, be deemed not to be material.

Because Mses. BairdBudinger and Einiger and Messrs. Bacow, Frenkel, Lustig, Patricof, Turchin and Twardock do not have any relationships with us other than those that are deemed not material under the foregoing categorical standards, our Board of Directors has determined that they are “independent directors” for purposes of the NYSE Rules.

Risk Oversight.    Our Board of Directors plays an important role in the risk oversight of Boston Properties. Our Board of Directors is involved in risk oversight through direct decision-making authority with respect to significant matters and the oversight of management by our Board of Directors and its committees. In particular, our Board of Directors administers its risk oversight function through (1) the review and discussion of regular periodic reports to our Board of Directors and its committees on topics relating to the risks that Boston Properties faces, including, among others, market conditions, tenant concentrations and credit worthiness, leasing activity and expirations, the status of current and anticipated development projects, compliance with debt covenants, management of debt maturities, access to debt and equity capital markets, existing and potential legal claims

against Boston Properties and various other matters relating to Boston Properties’ business, (2) the required approval by our Board of Directors (or a committee thereof) of significant transactions and other decisions, including, among others, acquisitions and dispositions of properties, development projects, new borrowings and the appointment and retention of Boston Properties’ senior management, (3) the direct oversight of specific areas of Boston Properties’ business by the Audit, Compensation and Nominating and Corporate Governance Committees, and (4) regular periodic reports from Boston Properties’ auditors and other outside consultants regarding various areas of potential risk, including, among others, those relating to the qualification of Boston Properties as a REIT for tax purposes and Boston Properties’ internal control over financial reporting. Our Board of Directors also relies on management to bring significant matters impacting Boston Properties to its attention.

Pursuant to the Audit Committee’s charter, the Audit Committee is specifically responsible for discussing the guidelines and policies that govern the process by which Boston Properties’ exposure to risk is assessed and managed by management. As part of this process, the Audit Committee oversees the planning and conduct of an annual risk assessment that is designed to identify and analyze risks to achieving Boston Properties’ business objectives. The results of the risk assessment are then discussed with management and used to develop Boston Properties’ annual internal audit plan. In addition, as one component of Boston Properties’ anti-fraud program, Boston Properties, under the supervision of the Audit Committee, established a hotline available to all employees for the anonymous and confidential submission of complaints relating to any matter to encourage employees to report questionable activities directly to our senior management and the Audit Committee.

Because of the role of our Board of Directors in the risk oversight of Boston Properties, our Board of Directors believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to Boston Properties’ operations. Our Board of Directors recognizes that there are different leadership structures that could allow it to effectively oversee the management of the risks relating to Boston Properties’ operations, and while our Board believes its current leadership structure enables it to effectively manage such risks, it was not the primary reason our Board of Directors selected its current leadership structure over other potential alternatives. See the discussion under the heading“Leadership Structure”above for a discussion of why our Board of Directors has determined that its current leadership structure is appropriate.

Meetings.    Our Board of Directors met nineeight times during 2010.2011. Each director attended at least 75% of the aggregate of (1) the total number of meetings of our Board of Directors (held during the period for which he or she has been a director) and (2) the total number of meetings of all committees of our Board of Directors on which the director served (during the periods that he or she served), other than Mr. Frederick J. Iseman, who resigned on October 8, 2010 to devote more time to his other business interests.. Directors are expected to attend annual meetings of our stockholders in person unless doing so is impracticable due to unavoidable conflicts. All but twoone of the directors then serving attended the 20102011 annual meeting of stockholders.

Directors who qualify as “non-management” within the meaning of the NYSE Rules meet on a regular basis in executive sessions without management participation. The executive sessions occur after each regularly scheduled meeting of the entire Board and at such other times that the non-management directors deem appropriate. Each director has the right to call an executive session. In addition, at least once per year, an executive session is held with only independent directors present. The executive sessions are chaired by the chair of the Board committee having jurisdiction over the particular subject matter to be discussed at the particular executive session or portion of an executive session.

Committees.    Our Board of Directors has the following three committees: (1) Audit, (2) Compensation and (3) Nominating and Corporate Governance. The membership and the function of each of these committees are described below.

Audit Committee.    Our Board of Directors has established an Audit Committee consisting of Messrs. Patricof (Chair) and Bacow and Ms. Einiger. The Audit Committee operates pursuant to a charter that was approved by our Board of Directors and that is reviewed and reassessed at least annually. The Audit Committee, among other functions, (1) has the sole authority to appoint, retain, terminate and determine the compensation of our independent accountants, (2) reviews with our independent accountants the scope and results of the audit engagement, (3) approves professional services provided by our independent accountants and (4) reviews the independence of our independent accountants. Each member of the Audit Committee is “independent” as that term is defined in the rules of the SEC and the applicable NYSE Rules. Our Board of Directors determined that Mr. Patricof qualifies as an “audit committee financial expert” as that term is defined in the rules of the SEC. The Audit Committee Report is included in this proxy statement on page 62.68. The Audit Committee met eight times during 2010.2011.

Compensation Committee.    Our Board of Directors has established a Compensation Committee consisting of Messrs. Twardock (Chair), Bacow and Frenkel. Mr. Richard E. Salomon’s service on the Compensation Committee ceased concurrently with the conclusion of his term as a director on May 18, 2010 and Mr. Iseman’s service on the Compensation Committee ceased concurrently with his resignation from our Board of Directors on October 8, 2010. Dr. Frenkel was appointed to the Compensation Committee on May 18, 2010 and Mr. Bacow was appointed to the Compensation Committee on October 11, 2010. Ms. Baird resigned from the Compensation Committee on July 22, 2010. None of the members of the Compensation Committee is an employee of Boston Properties and each of them is an independent director under the NYSE Rules.

The Compensation Committee operates pursuant to a charter that was approved by our Board of Directors and that is reviewed and reassessed at least annually. The Compensation Committee’s responsibilities include, among other duties, the responsibility to (1) review and approve the corporate goals and objectives relevant to the compensation of the Chairman, the Chief Executive Officer and certain designated senior executive officers, (2) evaluate the performance of the Chairman, the Chief Executive Officer and designated senior executive officers in light of such goals and objectives and determine and approve compensation of such officers based on such evaluation, (3) review and approve the compensation of other executive officers, (4) review and approve grants and awards under all incentive-based compensation plans and equity-based plans and (5) perform other functions or duties deemed appropriate by our Board of Directors.

The Compensation Committee makes all compensation decisions for all executive officers. With respect to compensation decisions relating to executive officers other than the Chairman and the Chief Executive Officer, the Compensation Committee takes into consideration recommendations made by the Chairman and Chief Executive Officer, the President and/or the Chief Operating Officer. Decisions regarding the non-equity compensation of other officers and employees are made by the Chief Executive Officer, the President and the Chief Operating Officer. The Compensation Committee has delegated limited authority to the Chief Executive Officer to make equity grants to employees who are not executive officers. In 2010,2011, the Compensation Committee once again engaged FTI Schonbraun McCann Group, or SMG, a real estate advisory practice of FTI Consulting, Inc. (“FTI”), to assist the committee in determining the amount and form of executive compensation. Information concerning the nature and scope of SMG’sFTI’s assignments and related disclosures is included in “Compensation“Compensation Discussion and Analysis” beginning on page 25. The Compensation Committee also reviews and makes recommendations to the full Board of Directors regarding the compensation of non-employee directors.

The Compensation Committee Report is included in this proxy statement on page 41.42. The Compensation Committee met ten17 times during 2010.2011.

Nominating and Corporate Governance Committee.    Our Board of Directors has established a Nominating and Corporate Governance Committee (the “NCG Committee”) consisting of Ms. BairdBudinger (Chair) and Messrs. Patricof and Twardock, each of whom is an independent director under the NYSE Rules. The NCG Committee operates pursuant to a charter that was approved by our Board of Directors and that is reviewed and reassessed at least annually. Under its charter, the NCG Committee is responsible for developing and annually reviewing and recommending to the Board a set of corporate governance guidelines. These corporate governance guidelines provide that the NCG Committee, together with our Chairman and Chief Executive Officer, is responsible for coordinating succession planning by the Board. The NCG Committee, among other functions specified in its charter, is also responsible for identifying individuals qualified to become Board members, consistent with criteria established by the NCG Committee, and recommending director nominees to the Board director nominees for election at each annual meeting of stockholders. TheIn addition, the NCG Committee is also responsible for developing and recommending to the Board a set of corporate governance guidelines, establishing a policy with regard to the consideration by the NCG Committee of director candidates recommended by securityholders, establishing procedures to be followed by securityholders submitting such recommendations and establishing a process for identifying and evaluating nominees for the Board, including nominees recommended by securityholders. The NCG Committee met three11 times during 2010.2011.

A copy of each of our Audit Committee, Compensation Committee and NCG Committee Charters is available on our website at http://www.bostonproperties.com under the heading “Corporate Governance.”

Our Board of Directors also has (1) a Special Transactions Committee, the current members of which are Messrs. Zuckerman and D. Linde, which may approve acquisitions, dispositions, financings and refinancings involving amounts less than $25 million and may approve refinancings in amounts greater than $25 million if the existing debt is increasing by less than $25 million, and (2) a Significant Transactions Committee, the current members of which are Messrs. Zuckerman, D. Linde and Twardock, which may approve acquisitions, dispositions, financings and refinancings involving amounts equal to or greater than $25 million but less than $200 million and may approve refinancings in amounts greater than $200 million if the existing debt is increasing by less than $200 million. On February 24, 2010, our Board of Directors appointed Mr. D. Linde to fill the vacancies on these committees resulting from the passing of Mr. E. Linde. The Special Transactions Committee held no meetings and took action by written consent sixthree times during 2010.2011. The Significant Transactions Committee held one meeting and took action by written consent one timetwo times during 2010.2011.

Our Board of Directors may from time to time establish other special or standing committees to facilitate the management of Boston Properties or to discharge specific duties delegated to the committee by the full Board of Directors.

Consideration of Director Nominees

Securityholder Recommendations.    The NCG Committee’s current policy is to review and consider any director candidates who have been recommended by securityholders in compliance with the procedures established from time to time by the NCG Committee. All securityholder recommendations for director candidates must be submitted to our Secretary at Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, MA 02199-8103, who will forward all recommendations to the NCG Committee. We did not receive any securityholder recommendations for director candidates for election at the 20112012 annual meeting in compliance with the procedures set forth below. All securityholder recommendations for director candidates for election at the 20122013 annual meeting of stockholders must be submitted to our Secretary on or before December 3, 2011November 30, 2012 and must include the following information:

Board Membership Criteria.    The NCG Committee has established criteria for NCG Committee-recommended director nominees. These criteria include the following specific, minimum qualifications that the NCG Committee believes must be met by an NCG Committee-recommended nominee for a position on the Board:

In addition to the minimum qualifications for each nominee set forth above, the NCG Committee will recommend director candidates to the full Board for nomination, or present director candidates to the full Board for consideration, to help ensure that:

Finally, in addition to any other standards the NCG Committee may deem appropriate from time to time for the overall structure and composition of the Board, the NCG Committee may consider the following factors when recommending director candidates to the full Board for nomination, or presenting director candidates to the full Board for consideration:

Identifying and Evaluating Nominees.    The NCG Committee may solicit recommendations for director nominees from any or all of the following sources: non-management directors, the Chairman, the Chief Executive Officer, other executive officers, third-party search firms or any other source it deems appropriate.

The NCG Committee will review and evaluate the qualifications of any proposed director candidate that it is considering or has been recommended to it by a securityholder in compliance with the NCG Committee’s procedures for that purpose, and conduct inquiries it deems appropriate into the background of these proposed director candidates. In identifying and evaluating proposed director candidates, the NCG Committee may consider, in addition to the minimum qualifications for NCG Committee-recommended director nominees, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed director candidate, his or her depth and breadth of business experience, his or her independence and the needs of our Board. Neither the NCG Committee nor the Board has a specific policy with regard to the consideration of diversity in identifying director nominees, although both may consider diversity when identifying and evaluating proposed director candidates. As noted above, the NCG Committee, when recommending director candidates to the full Board for nomination, may consider whether a director candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience. Other than circumstances in which we may be legally required by contract or otherwise to provide third parties with the ability to nominate directors, the NCG Committee will evaluate all proposed director candidates that it considers or who have been properly recommended to it by a securityholder based on the same criteria and in substantially the same manner, with no regard to the source of the initial recommendation of the proposed director candidate.

Communications with the Board

Stockholders and other interested parties who wish to communicate with any of our directors or the Board of Directors as a group, may do so by writing to them at [Name(s) of Director(s)/Board of Directors of Boston Properties, Inc.], c/o Compliance Officer, Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, MA 02199-8103.

Stockholders and other interested parties who wish to contact the Audit Committee to report complaints or concerns regarding accounting, internal accounting controls or auditing matters, may do so by writing to the Chair of the Audit Committee of Boston Properties, Inc., c/o Compliance Officer, Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, MA 02199-8103. You are welcome to make any such reports anonymously, but we prefer that you identify yourself so that we may contact you for additional information if necessary or appropriate.

Stockholders and other interested parties who wish to communicate with our non-management directors as a group, may do so by writing to Non-Management Directors of Boston Properties, Inc., c/o Compliance Officer, Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, MA 02199-8103.

We recommend that all correspondence be sent via certified U.S. mail, return receipt requested. All correspondence received by the Compliance Officer will be forwarded by the Compliance Officer promptly to the addressee(s).

Corporate Governance Guidelines

Our Board of Directors adopted Corporate Governance Guidelines, a copy of which is available on our website at http://www.bostonproperties.com under the heading “Corporate Governance.”

Code of Business Conduct and Ethics

Our Board of Directors adopted a Code of Business Conduct and Ethics, which governs business decisions made and actions taken by our directors, officers and employees. A copy of this Code is available on our website at http://www.bostonproperties.com under the heading “Corporate Governance.” We intend to disclose on this website any amendment to, or waiver of, any provision of this Code applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE Rules.

PROPOSAL 1: ELECTION OF DIRECTORS

Introduction

At the annual meeting, four Class IIseven directors will be elected to serve for a one-year term until the 20122013 annual meeting of stockholders and until their respective successors are duly elected and qualified. Following the recommendation of the NCG Committee, our Board of Directors has nominated Mr. Lawrence S. Bacow, Ms. Zoë Baird Budinger, Mr. Douglas T. Linde, Mr. Matthew J. Lustig, Mr. Alan J. Patricof, and Mr. Martin Turchin and Mr. David A. Twardock for election. Ms. Baird and Messrs. Bacow, Patricof, Turchin areEach nominee is currently serving as directorsa director of Boston Properties. In making its recommendations, the NCG Committee considered a number of factors, including its criteria for Board membership, which included the minimum qualifications that must be possessed by a director candidate in order to be nominated for a position on our Board. Our Board of Directors anticipates that, if elected, the nominees will serve as directors. However, if any person nominated by our Board of Directors is unable to serve or for good cause will not serve, the proxies will be voted for the election of such other person as our Board of Directors may recommend.

At the 2010 annual meeting of stockholders, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation that provides for the annual election of directors. As a result, commencing with the class of directors standing for electionwho were elected at the 2011 annual meeting of stockholders directors will stand for election for one-year terms expiring atand the next succeeding annual meetingclass of stockholders. The directors who were elected at the 2009 annual meeting of stockholders, whose terms will expire inat the 2012 annual meeting of stockholders, will stand for election for one-year terms expiring at the 2013 annual meeting of stockholders. The class of directors who were elected at the 2010 annual meeting of stockholders, whose terms will expire in 2013, and any directors appointed by our Board of Directors to fill a vacancy prior to the 2011 annual meeting of stockholders will hold office until the end of their terms. In all cases, each director will hold office until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. Any director appointed to our Board of Directors to fill a vacancy following the 2011 annual meeting of stockholders will hold office for a term expiring at the next annual meeting of stockholders following such appointment.

Vote Required

In connection with the amendment to our Amended and Restated Certificate of Incorporation providing for the annual election of directors, our Board of Directors adopted an amendment to our By-laws providing for majority voting in the election of directors in uncontested elections. Specifically, our By-laws provide that, in an uncontested election, nominees for director are elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. The majority voting standard would not apply in contested elections, which, generally, will include any situation in which Boston Properties receives a notice that a stockholder has nominated a person for election to our Board of Directors at a meeting of stockholders that is not withdrawn on or before the tenth day before Boston Properties first mails its notice for such meeting to the stockholders.

The majority voting standard will apply to the election of directors at the 20112012 annual meeting of stockholders. Accordingly, nominees for director will be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Broker non-votes, if any, and abstentions will not be treated as votes cast.

Our Board of Directors has also adopted a resignation policy, included in our Corporate Governance Guidelines, under which a director who fails to receive the required number of votes for re-election will tender his or her resignation to our Board of Directors for its consideration. The NCG Committee will act on an expedited basis to determine whether it is advisable to accept the director’s resignation and will submit the recommendation for prompt consideration by our Board of Directors. Our Board of Directors will act on the tendered resignation within 90 days following certification of the stockholder vote and will promptly and publicly disclose its decision. The director whose resignation is under consideration will abstain from participating in any decision regarding his or her resignation. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. The NCG Committee and our Board of Directors may consider any factors they deem relevant in deciding whether to accept a director’s resignation.

Recommendation

The Board of Directors unanimously recommends a voteFOR its nominees, Lawrence S. Bacow, Zoë Baird Budinger, Douglas T. Linde, Matthew J. Lustig, Alan J. Patricof, Martin Turchin and Martin Turchin.David A. Twardock. Properly authorized proxies solicited by the Board will be votedFOR each of the nominees unless instructions to the contrary are given.

Information Regarding the Nominees, Other Directors and Executive Officers

The following biographical descriptions set forth certain information with respect to the nominees for election as directors at the annual meeting, each director who is not standing for election and the executive officers who are not directors, based on information furnished to Boston Properties by each nominee, director and executive officer. Each executive officer holds office until the regular meeting of the Board of Directors following the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.

The biographical description below for each nominee includes the specific experience, qualifications, attributes and skills that led to the conclusion by our Board of Directors that such person should serve as a director of Boston Properties. The biographical description of each director who is not standing for election includes the specific experience, qualifications, attributes and skills that our Board of Directors would expect to consider if it were making a conclusion currently as to whether such person should serve as a director. The Board of Directors did not currently evaluate whether these directors should serve as directors, as the terms for which they have been previously elected continue beyond the annual meeting.

Directors with Terms Expiring 20112012

Lawrence S. Bacow.    Mr. Lawrence S. Bacow has been a director since May 7, 2003. SinceHe currently is the President-in-Residence at the Harvard Graduate School of Education. From September 2001 until August 2011, Mr. Bacow has served as President of Tufts University, which had more than 10,000 students enrolled and an operating budget of more than $650 million for its fiscal year ended June 30, 2010. Prior to his appointment to this position, Mr. Bacow served in various capacities at the Massachusetts Institute of Technology, including Chancellor from August 1998 to June 2001. During his 24-year tenure at the Massachusetts Institute of Technology, Mr. Bacow was the Lee and Geraldine Martin Professor of Environmental Studies in the Department of Urban Studies and Planning and he also was the founding Director of the MIT Center for Real Estate Development, the Chair of the MIT Council on the Environment and the Chairman of the Faculty of the Massachusetts Institute of Technology. Mr. Bacow currently serves on the boards of Loews Corporation and Liquidnet, Inc. Mr. Bacow previously served as a director of Grubb & Ellis Company, a commercial real estate advisory firm, and an executive vice president of Spaulding Investment Company. During his career, Mr. Bacow has held professorships and other academic positions involving researching and teaching on real estate and related topics. Mr. Bacow serves as a trusteeFellow of TuftsHarvard College, the senior governing board of Harvard University, where he chairs the Facilities and Cummings Foundation and Chair of the Tallories Network.Capital Planning Committee. He received an SB in Economics from the Massachusetts Institute of Technology and a Ph.D., an MPP and a JD from Harvard University. He is 5960 years old.

Zoë Baird.Baird Budinger.    Ms. Zoë Baird Budinger has been a director since May 11, 2005. Since January 1998 she has served as President of the Markle Foundation, a private philanthropy that focuses on using information and communications technologies to address critical public needs, particularly in the areas of health care and national security. Ms. Baird serves as Co-Chair of the Markle Task Force on National Security in the Information Age and participates in the Steering Committee of Markle’s Connecting for Health Initiative. Ms. BairdBudinger previously gained extensive experience in the legal profession, including senior governmental positions and positions with large public companies, a prominent law firm and Yale Law School, during which time she has gained significant experience spanning a broad range of legal matters, including corporate governance matters. Ms. BairdBudinger previously had been Senior Vice President and General Counsel of Aetna, Inc., an international insurance company, from 1990 to 1996, and a senior visiting scholar at Yale Law School from 1996 to 1997. Prior to holding such positions, Ms. BairdBudinger had served as

Counselor and Staff Executive of General Electric Co., a partner in the international law firm of O’Melveny and Myers, an associate general counsel to President Jimmy Carter

and an attorney in the Office of Legal Counsel of the United States Department of Justice. Ms. Baird founded and serves as Chair Emeritus on the board of Lawyers for Children America, which is concerned with the impact of violence on children. Ms. BairdBudinger is a member of the Council on Foreign Relations and the Advisory Board for the Lloyd N. Cutler Center for the Rule of Law at the Salzburg Global Seminar and The Trilateral Commission, and she serves on the board of The Chubb Corporation and as a member of Pfizer, Inc.’s U.S. Health Advisory Board.Corporation. She also serves as an honorary trustee of The Brookings Institution and serves as a director of the U.S. China Youth Forum.Institution. She has also served on the Technology & Privacy Advisory Committee to the United States Secretary of Defense from 2003 to 2004, President Clinton’s Foreign Intelligence Advisory Board from 1993 to 2001 and the International Competition Policy Advisory Committee to the United States Attorney General from 1997 to 2000. Ms. BairdBudinger received an undergraduate degree from the University of California at Berkeley with majors in communications and public policy, as well as political science. She also received a JD from the University of California at Berkeley’s Boalt School of Law. She is 5859 years old.

Alan J. Patricof.    Mr. Alan J. Patricof has been a director since June 23, 1997. Mr. Patricof has more than 40 years of experience leading venture capital firms, during which time he has completed several billion dollars of investments in a diverse range of companies and gained significant expertise evaluating investment opportunities and overseeing the management development and operations of portfolio companies. Currently, Mr. Patricof is Managing Director of Greycroft, LLC, a venture capital firm he formed in 2006, which has more than $200 million under management. Prior to that, he was Chairman of Apax Partners, Inc. (formerly Patricof & Co. Ventures, Inc.), a venture capital company that he founded in 1969, which is now one of the world’s leading private equity firms with approximately $40 billion under management or advice. He is a board member of TechnoServe, the Trickle Up Program, National Foundation for Teaching Entrepreneurship (NFTE), the Initiative for Global Development (IGD) Leadership Council and the Millennium Challenge Corporation and serves on the Global Advisory Board of Endeavor, Inc. Mr. Patricof received a BS in Finance from Ohio State University and an MBA from Columbia Business School. He is 76 years old.

Martin Turchin.    Mr. Martin Turchin has been a director since June 23, 1997. Mr. Turchin serves as Vice-Chairman of CB Richard Ellis, the world’s largest real estate services company. From 1985 until its merger with CB Richard Ellis in July 2003, Mr. Turchin served as Vice-Chairman of Insignia/ESG, Inc., a subsidiary of Insignia Financial Group, which was one of the nation’s largest commercial real estate brokerage, consulting and management firms. Prior to joining Insignia/ESG, Inc., he spent 14 years with Kenneth E. Laub & Company, Inc. where he was involved in real estate acquisition, financing, leasing and consulting. Mr. Turchin has more than 30 years experience as a commercial real estate broker, consultant and advisor and has been involved in some of the largest real estate transactions in the United States. During his career, he has orchestrated more than 50 million square feet of real estate transactions. He is a three-time recipient of the Real Estate Board of New York’s “Most Ingenious Deal of the Year Award” and a two-time recipient of the “Robert T. Lawrence Award.” Mr. Turchin serves on the board of GenCorp Inc. He holds a BS from City College of the University of New York and a JD from St. John’s Law School. He is 69 years old.

Directors with Terms Expiring 2012

Douglas T. Linde.    Mr. Douglas T. Linde has been a director since January 21, 2010. Mr. Linde serves as President of Boston Properties, Inc. Prior to his appointment to this position in May 2007, he served as Executive Vice President since January 2005 and he also served as Chief Financial Officer and Treasurer from 2000 until November 2007. He joined Boston Properties in January 1997 as Vice President of Acquisitions and New Business to help identify and execute acquisitions and to develop new business opportunities and was promoted to Senior Vice President for Financial and Capital Markets in October 1998. Prior to joining Boston Properties, Mr. Linde served from 1993 to 1997 as President of Capstone Investments, a Boston real estate investment company. From 1989 to 1993, he served as Project Manager and Assistant to the Chief Financial Officer of Wright Runstad and Company, a private real estate developer in Seattle, WA. He began his career in the real estate industry with Salomon Brothers’ Real Estate Finance Group. Mr. Linde is a member of the Board of Directors of Beth Israel Deaconess Medical Center and serves on the Finance Committee. He is a member of the

Real Estate Roundtable and serves as a director of the Boston Municipal Research Bureau and Jobs for Massachusetts. Mr. Linde also serves on the Urban Studies and Planning Visiting Committee at MIT. Mr. Linde received a BA from Wesleyan University in 1985 and an MBA from Harvard Business School in 1989. Mr. Linde’s father, Edward H. Linde, served as our Chief Executive Officer and a director until his passing in January 2010. Mr. Linde is 4748 years old.

Matthew J. Lustig.    Matthew J. Lustig has been a director since January 20, 2011. Mr. Lustig has worked for more than 25 years in the real estate industry, during which time he gained extensive experience providing strategic and financial advice and execution to clients, and investing in real estate companies and assets as a principal. Mr. Lustig is Vice Chairman of U.S. Investment Banking and Head of Real Estate at Lazard Frères & Co. (“Lazard”), the investment bank, and, separately, Chief Executive Officer of Lazard Real Estate Partners LLC (“LREP”), the real estate investment business of Lazard Alternative Investments LLC (“LAI”). He is responsible for Lazard’s real estate investment banking activities, as well as LAI’s real estate fund activities. In recent years, he has played an active role in more than $200 billion of advisory assignments and transactions involving leading real estate companies in the public and private markets. At LREP, Mr. Lustig has overseen multiple funds with over $2.5 billion of equity capital invested in real estate operating companies and properties. Prior to joining Lazard in 1989, Mr. Lustig was a First Vice President in the real estate group at Drexel Burnham Lambert and, before that, was a lending officer at Chase Manhattan Bank specializing in credit, construction and real estate finance. Mr. Lustig is currently Board Chairmana member of the board of directors of Ventas, Inc. and he previously served as the chairman of Atria Senior Living Group, Inc., an assisted livingwhich was acquired by Ventas in May 2011. Mr. Lustig also serves as the Chairman of the Board of Atria Senior Living, Inc., a private senior housing management company andthat was formed prior to the disposition of Atria Senior Living Group, Inc. to Ventas. He has also served as a director of several other public and private LREP portfolio companies. Mr. Lustig is a member of the Real Estate Roundtable and numerous other industry organizations, and he serves on the boards of Pension Real Estate Association, Larson Leadership Initiative at the Urban Land Institute, The Wharton School Samuel Zell/Robert Lurie Real Estate Center and the Real Estate Advisory Board at Columbia University School of Business. He also serves on the Board of Visitors at the School of Foreign Service at Georgetown University from which he graduated with a BSFS. He is 51 years old.

Alan J. Patricof.    Mr. Alan J. Patricof has been a director since June 23, 1997. Mr. Patricof has more than 40 years of experience leading venture capital firms, during which time he has completed several billion dollars of investments in a diverse range of companies and gained significant expertise evaluating investment opportunities and overseeing the management development and operations of portfolio companies. Currently, Mr. Patricof is Managing Director of Greycroft, LLC, a venture capital firm he formed in 2006, which has more than $200 million under management. Prior to that, he was Chairman of Apax Partners, Inc. (formerly Patricof & Co. Ventures, Inc.), a venture capital company that he founded in 1969, which is now one of the world’s leading private equity firms with approximately $40 billion under management or advice. He is a board member of TechnoServe, the Trickle Up Program, National Foundation for Teaching Entrepreneurship (NFTE), the Initiative for Global Development (IGD) Leadership Council and the Millennium Challenge Corporation and serves on the Global Advisory Board of Endeavor, Inc. Mr. Patricof received a BS in Finance from Ohio State University and an MBA from Columbia Business School. He is 77 years old.

Martin Turchin.    Mr. Martin Turchin has been a director since June 23, 1997. Mr. Turchin serves as Vice-Chairman of CB Richard Ellis, the world’s largest real estate services company. From 1985 until its merger with CB Richard Ellis in July 2003, Mr. Turchin served as Vice-Chairman of Insignia/ESG, Inc., a subsidiary of Insignia Financial Group, which was one of the nation’s largest commercial real estate brokerage, consulting and management firms. Prior to joining Insignia/ESG, Inc., he spent 14 years with Kenneth E. Laub & Company, Inc. where he was involved in real estate acquisition, financing, leasing and consulting. Mr. Turchin has more than 30 years experience as a commercial real estate broker, consultant and advisor and has been involved in some of the largest real estate transactions in the United States. During his career, he has orchestrated more than 50 million square feet of real estate transactions. He is a three-time recipient of the Real Estate Board of New York’s “Most Ingenious Deal of the Year Award” and a two-time recipient of the “Robert T. Lawrence Award.” Mr. Turchin serves on the board of GenCorp Inc. He holds a BS from City College of the University of New York and a JD from St. John’s Law School. He is 70 years old.

David A. Twardock.    Mr. David A. Twardock has been a director since May 7, 2003. Mr. Twardock has more than 25 years of experience in the real estate finance industry, during which time he has overseen the lending and asset management of billions of dollars of commercial mortgages and other real estate debt financing and the management and disposition of billions of dollars of real estate equity. Currently, Mr. Twardock is the President of Prudential Mortgage Capital Company, LLC, the real estate finance affiliate of Prudential Financial, Inc., which had more than $65$66 billion in assets under management and administration as of December 31, 20102011 and annually lends billions of dollars in real estate debt financing. Since 1982, Mr. Twardock has held numerous positions relating to real estate equity and debt with Prudential, including his position from 1996 to November 1998 as Senior Managing Director of Prudential Realty Group. Mr. Twardock is a member of the Urban Land Institute, International Council of Shopping Centers and the Economics Club of ChicagoChicago. Mr. Twardock currently serves as a director of the Real Estate Roundtable and he previously served as Chairman of the Real Estate Roundtable Capital Markets Committee. Mr. Twardock serves as a director of Prudential Mortgage Capital Holdings Corp. and its various subsidiaries, Prudential Asset Resources, Inc. and Prudential Realty Securities, Inc. He received a BS in Civil Engineering from the University of Illinois and an MBA in Finance and Behavioral Science from the University of Chicago. He is 5354 years old.

Directors with Terms Expiring 2013

Mortimer B. Zuckerman.    Mr. Mortimer B. Zuckerman serves as Chief Executive Officer and Chairman of the Board of Directors and Chief Executive Officer of Boston Properties, Inc. and has been a director since June 23, 1997. Mr. Zuckerman was appointed Chief Executive Officer on January 10, 2010. Mr. Zuckerman co-founded Boston Properties in 1970 after spending seven years at Cabot, Cabot & Forbes where he rose to the position of Senior Vice President and Chief Financial Officer. He is also Chairman and Editor-in-Chief of U.S. News & World Report and Chairman and Publisher of the New York Daily News. He serves as trustee of Memorial Sloan-Kettering and he is also a member of The International Peace Institute, the Bank of America Global Wealth & Investment Management Committee, the Council on Foreign Relations, the Washington Institute for Near East Studies, the International Institute of Strategic Studies

and the Board of Directors for the Broad Center for the Management

of School Systems. He is also a member, secretary and treasurer of the International Peace Institute. Mr. Zuckerman is the vice chairman of the Funds for Public Schools, a former Associate Professor of City and Regional Planning at the Harvard Graduate School of Design, a former lecturer of City and Regional Planning at Yale University and a past president of the Board of Trustees of the Dana Farber Cancer Institute in Boston. Mr. Zuckerman was awarded the Commandeur De L’Ordre des Arts et des Lettres by the government of France, the Lifetime Achievement Award from Guild Hall and the Gold Medal from the American Institute of Architecture in New York. Mr. Zuckerman is a graduate of McGill University in Montreal where he received an undergraduate degree with first class honors in 1957 and a degree in law in 1961. He received an MBA with distinction from the Wharton School, University of Pennsylvania in 1961 and an LLM from Harvard University in 1962. He has also received fivethree honorary degrees. He is 7374 years old.

Carol B. Einiger.    Ms. Carol B. Einiger has been a director since May 5, 2004. Ms. Einiger has more than 35 years of experience as an investment banker and investment advisor, during which time she has gained significant expertise in the operation of public and private debt and equity capital markets and the evaluation of investment opportunities. Ms. Einiger is President of Post Rock Advisors, LLC, a private investment advisory firm established in 2005. Ms. Einiger began her investment career in 1971 at Goldman, Sachs & Co. and worked at The First Boston Corporation from 1973 to 1988, becoming Managing Director and head of the Capital Markets Department and the Short-Term Finance Department. In 1988, Ms. Einiger became Executive-in-Residence and Visiting Professor at Columbia Business School, and in 1989 she joined Wasserstein Perella & Co. as Managing Director. She joined the Edna McConnell Clark Foundation in 1992, serving as Chief Financial Officer and then Acting President until 1996. From 1996 through 2005, Ms. Einiger served as Chief Investment Officer of The Rockefeller University, where she was responsible for the management of the University’s endowment. Ms. Einiger is a Director of The New York Stem Cell Foundation, a member of the Board of Overseers of Columbia Business School and a trustee and a member of the Investment Committee of UJA-Federation of New York. She previously served on the Boards of Trustees and Investment Committees of the University of Pennsylvania, the Horace Mann School and the Lasker Foundation; as Vice Chair of the Investment Committee of The Museum of Modern Art; as a Director of Credit Suisse First Boston (USA); and on the Advisory Board of Blackstone Alternative Asset Management. Ms. Einiger is the recipient of numerous awards, including the Alumni Award of Merit of the University of Pennsylvania, the Columbia Business School Distinguished Alumna Award, the AJC National Human Relations Award, the Anti-Defamation League Woman of Achievement Award and the Catalyst Award for Corporate Leadership. She received a BA from the University of Pennsylvania and an MBA with honors from Columbia Business School. She is 6162 years old.

Dr. Jacob A. Frenkel.    Dr. Jacob A. Frenkel has been a director since February 24, 2010. Dr. Frenkel has worked for more than 40 years in the financial industry, government and academia, during which time he gained significant knowledge of global macroeconomics and experience advising large financial institutions. Dr. Frenkel has been the Chairman of JPMorgan Chase International and a member of the executive committee of JPMorgan Chase & Co. since December 2009. Since November 2009, Dr. Frenkel has served as a director of Loews Corporation, one of the largest diversified holding companies in the United States. Dr. Frenkel is Chairman and Chief Executive Officerof the Board of Trustees of the Group of Thirty (G-30), a private, nonprofit, consultative group on international economic and monetary affairs. He has been a member of this group since 1988.1988 and served as Chairman and Chief Executive Officer from 2000 to 2011. He previously served as Vice Chairman of American International Group, Inc. from 2004 to 2009. He was with Merrill Lynch Inc. between 2000 and 2004 and served as Chairman of Merrill Lynch International. Prior to that, he served for two terms as Governor of the Bank of Israel from 1991 to 2000. Dr. Frenkel was also Chairman of the Board of Governors of the Inter-American Development Bank, Vice Chairman of the Board of Governors of the European Bank for Reconstruction and Development and Economic Counselor and Director of Research at the International Monetary Fund. Dr. Frenkel also held numerous academic positions. Between 1971 and 1987, he was at the University of Chicago where he served as the David Rockefeller Professor of International Economics. He received a BA in Economics and Political Science from Hebrew University in Israel and an MA and Ph.D. in Economics from the University of Chicago. He is 6869 years old.

Executive Officers who are not Directors

E. Mitchell Norville.    Mr. E. Mitchell Norville serves as Executive Vice President, Chief Operating Officer with responsibilities for administrative policy, day-to-day control of our operations and oversight of our development activities. Prior to his promotion to this position in May 2007, Mr. Norville served as Executive Vice President for Operations since September 2005. From March 1998 to September 2005, Mr. Norville served as Senior Vice President and Regional Manager of our Washington, D.C. office. In that capacity he was in charge of all regional development activities as well as responsible for all leasing, construction, property management and administrative activities. From 1994 to 1998, he served as Senior Vice President and Senior Project Manager in our Washington, D.C. region, with responsibilities for various project developments. Mr. Norville is a member of the Clemson University President’s Advisory Board, a Board member of the Clemson University Foundation and he is a member of the Clemson University Center For Real Estate Development (CRED) Advancement Board. He received a BS in Mechanical Engineering from Clemson University in 1980 and an MBA from the University of Virginia in 1984. He is 52 years old.

Raymond A. Ritchey.    Mr. Raymond A. Ritchey serves as Executive Vice President, Head of the Washington, D.C. Office and National Director of Acquisitions and Development. Prior to his appointment in April 1998 to this position, he served as Senior Vice President and Co-Manager of our Washington, D.C. office. In his current position, Mr. Ritchey is responsible for all business development, leasing and marketing as well as new opportunity origination in the Washington, D.C. area. He also directly oversees similar activities on a national basis. Mr. Ritchey joined us in 1980, leading our expansion to become one of the dominant real estate firms in the Washington, D.C. metropolitan area. For four years prior to joining us, Mr. Ritchey was one of the leading commercial real estate brokers in the Washington, D.C. area with Coldwell Banker. He is a 1972 graduate of the U.S. Naval Academy and a 1973 graduate of the U.S. Naval Post Graduate School in Monterey, California. He is 6061 years old.

Michael E. LaBelle.    Mr. Michael E. LaBelle serves as Senior Vice President, Chief Financial Officer and Treasurer. Prior to his appointment to this position in November 2007, Mr. LaBelle served as Senior Vice President, Finance since February 2005. His primary responsibilities have included managing all debt capital market activities, including maintaining our relationships with our rating agencies and lending institutions, supervising treasury management and underwriting tenant credit capacity. In his current role, Mr. LaBelle oversees the finance, accounting, internal audit and investor relations departments and is also responsible for capital raising, financial strategy and planning. Prior to joining us in March 2000, Mr. LaBelle held the position of Vice President & Relationship Manager with Fleet National Bank for nine years with the responsibility of financing large-scale commercial real estate developments. He started his career as an Associate National Bank Examiner with the Office of the Comptroller of the Currency in New York City specializing in commercial real estate debt portfolio analysis and valuation in commercial banks located throughout the Mid-Atlantic and Northeastern United States. Mr. LaBelle is a former member of the Board of Directors for the Boston Chapter of the Real Estate Finance Association. Mr. LaBelle holds a BS degree in Economics from the University of Colorado. He is 4647 years old.

Peter D. Johnston.    Mr. Peter D. Johnston serves as Senior Vice President and Regional Manager of our Washington, D.C. office. He is in charge of all operations including project development, leasing, construction, property management and administrative activities for our Washington, D.C. office, with a staff of approximately 200170 people. Mr. Johnston joined the Company in 1987. In 1989 he was promoted to Project Manager, with subsequent promotions in 1991 to Vice President and in 1997 to Senior Vice President. In 2003 he was appointed head of the development team in the Washington, D.C. Region and held this position until his promotion in September 2005 to the position of Regional Manager. Mr. Johnston has been directly responsible for more than four million square feet of new development and renovation projects. He is a past member of the board of directors of the Northern Virginia Chapter of the National Association of Industrial and Office Properties (NAIOP). Mr. Johnston received a BA in Business Administration from Roanoke College, an MA in 1982 from Hollins College and an MBA in 1987 from the University of Virginia. He is 5253 years old.

Bryan J. Koop.    Mr. Bryan J. Koop serves as Senior Vice President and Regional Manager of our Boston office. Mr. Koop is responsible for overseeing the operation of our existing regional portfolio in the Boston area, which includes the Prudential Center and Cambridge Center. He is also responsible for developing new business opportunities in the area. Prior to joining us in 1999, Mr. Koop served at Trammell Crow Company from 1982 to 1999 where his career covered high-rise office building leasing and the development of commercial office buildings and shopping centers. From 1993 to 1999, his position was Managing Director and Regional Leader for Trammell Crow Company’s New England region, which included all commercial office and shopping center operations. Mr. Koop is a member of the Board of Directors for the Massachusetts Chapter of NAIOP and previously served as chairman of the Back Bay Association. Mr. Koop received a BBA in 1980 and an MBA in 1982 from Texas Christian University. He is 5253 years old.

Mitchell S. Landis.    Mr. Mitchell S. Landis serves as Senior Vice President and Regional Manager of our Princeton office. Prior to his appointment to this position in February 2001, he served as Vice President and Regional Manager of our Princeton office. He is responsible for overseeing development, leasing and management for the Carnegie Center and Tower Center assets and for the pursuit of new business opportunities in the region. Mr. Landis joined Boston Properties in June 1998 when we acquired the assets of The Landis Group, for which he was Chief Operating Officer. For 19 years prior to that, he owned and operated Landis Food Services, a restaurant franchiser and owner in the Northeast United States and Canada. Mr. Landis received a BS degree in Economics from New York University in 1973 and completed coursework toward a master’s degree in Economics in 1975. Mr. Landis is 6061 years old.

Robert E. Pester.    Mr. Robert E. Pester serves as Senior Vice President and Regional Manager of our San Francisco office, with responsibility for all of our activities on the West Coast. Mr. Pester is responsible for overseeing existing operations at the Embarcadero Center and our other Bay Area properties on the Peninsula and in Silicon Valley, and developing new business opportunities in the area. Prior to joining us in 1998, he served as Executive Vice President and Chief Investment Officer of Bedford Property Investors, a real estate investment trust in Lafayette, CA, where he led the acquisitions and development program. Prior to 1994, he was President of Bedford Property Development, a private West Coast development concern that held more than $2 billion in real estate assets. From 1980 to 1989, he was a leading commercial real estate broker with Cushman & Wakefield in northern California, where he last served as Vice President. He is a 1979 graduate of the University of California at Santa Barbara with a BA in Economics and Political Science. He is 5455 years old.

Robert E. Selsam.    Mr. Robert E. Selsam serves as Senior Vice President and Regional Manager of our New York office. He oversees all aspects of our New York activities, including development, acquisitions, leasing and building operations. He joined us as a Vice President in 1984, prior to which he was Director of Planning for the Metropolitan Transportation Authority of the State of New York. Mr. Selsam is a member of the Board of Governors of the Real Estate Board of New York and is a board member of the New York Building Congress. He is also a trustee of the Phipps Houses and a memberchairman of the Executive Committee of Phipps Houses, past Chairman of the Salvadori Center and a member of the Advisory Board of Goldman Family Enterprises. He received a BA from the University of Pennsylvania in 1968 and an MS in Urban Planning from the Columbia University School of Architecture in 1970. He is 6465 years old.

Frank D. Burt.    Mr. Frank D. Burt serves as Senior Vice President and General Counsel, a position he has held since 2003. He is responsible for overseeing the legal department and the delivery of legal services for Boston Properties. Mr. Burt has served in various capacities since he joined us in 1986, and he represented us in the acquisition of the Prudential Center in Boston and the Embarcadero Center in San Francisco, as well as in the development activities at the Prudential Center. He previously worked in the real estate department at Nutter, McClennen & Fish in Boston. Mr. Burt is a member of the Boston Bar Association and a speaker for Massachusetts Continuing Legal Education and the National Association of Real Estate Investment Trusts.Trusts (“NAREIT”). Mr. Burt received a BA, magna cum laude, from Brown University in 1980 and a JD, cum laude, from the University of Pennsylvania Law School in 1983. Mr. Burt is 5253 years old.

Arthur S. Flashman.    Mr. Arthur S. Flashman serves as Vice President and Controller. He is responsible for overseeing financial reporting, property accounting and tax compliance and is also responsible for providing transactional support on capital markets activity. Prior to joining us in 2002, Mr. Flashman served as an Asset Manager with the Winn Companies and previous to this role he was with PricewaterhouseCoopers LLP where he specialized in real estate, serving both public REITs and private institutional funds. Mr. Flashman is a member of the Best Financial Practices Council of NAREIT and a member of the Real Estate Roundtable. He also served as chairman of the accounting committee of NAREIT. Mr. Flashman received a BS/BA in finance and accounting from Boston University in 1984 where he was elected to the Beta Alpha Psi honor society. Mr. Flashman is 4950 years old.

PRINCIPAL AND MANAGEMENT STOCKHOLDERS

The table below shows the amount of common stock of Boston Properties, Inc. and units of partnership interest in Boston Properties Limited Partnership (the “Operating Partnership”) beneficially owned as of February 1, 20113, 2012 by:

On February 1, 2011,3, 2012, there were:

All references in this proxy statement to LTIP units include long term incentive units of partnership interest in the Operating Partnership, but exclude LTIP units issued in the form of 20082011 outperformance awards and 20112012 outperformance awards. LTIP units issued in the form of 20082011 outperformance awards and 20112012 outperformance awards are collectively referred to herein as “OPP Awards.”

(2)

The total number of shares outstanding used in calculating this percentage assumes (a) the exercise of all options to acquire shares of common stock that are exercisable on or within 60 days after February 1, 20113, 2012 held by the beneficial owner and that no options held by other beneficial owners are exercised and (b) the conversion into shares of common stock of all deferred stock units held by the beneficial owner and that no deferred stock units held by other beneficial owners are converted.

(3)

The total number of shares outstanding used in calculating this percentage assumes (a) that all common units, LTIP units and Series Two preferred units are presented (assuming conversion in full into common units, if applicable) to Boston Properties for redemption and are acquired by Boston Properties for shares of common stock, (b) does not separately include outstanding common units held by Boston Properties, as these common units are already reflected in the denominator by the inclusion of all outstanding shares of common stock, (c) the exercise of all options to acquire shares of common stock that are exercisable on or within 60 days after February 1, 20113, 2012 held by the beneficial owner and that no options held by other beneficial owners are exercised and (d) the conversion into shares of common stock of all deferred stock units.

(4)

Represents 1,495,179Includes 1,495,292 shares of common stock held directly.directly and 12,646 shares of common stock underlying exercisable stock options. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 6,215,294 common units held directly, 46,474 common units held by limited partnerships of which the sole general partners are limited liability companies of which Mr. Zuckerman is the sole member and manager and 410,414448,586 LTIP units (of which 169,979134,509 LTIP units are subject to vesting). Excludes 529,889 shares of common stock held by The MBZ Charitable Remainder Unitrust, of which Mr. Zuckerman is the grantor, and 1,405,392 common units held by The MBZ 1996 Trust (GST Non-Exempt), of which Mr. Zuckerman is the grantor. Also excludes OPP Awards.

(5)	Includes 868434 shares of common stock (all of which are subject to vesting) and 9,2879,472 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 2,8151,408 LTIP units (of which 710823 LTIP units are subject to vesting).

(6)	Includes 1,834 shares of common stock (of which 710 shares are subject to vesting)held directly and 4,0375,194 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 2,3633,186 LTIP units (of which 8681,257 LTIP units are subject to vesting).

(7)	Includes 1,283 shares of common stock held directly (of which 868434 shares are subject to vesting) and 8,1359,296 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 4,0074,830 LTIP units (of which 710823 LTIP units are subject to vesting).

(8)	Represents, only under the “Number of Shares and Units Beneficially Owned” column, 7261,549 LTIP units (all of(of which 1,187 LTIP units are subject to vesting).

(9)

Includes 30,087 shares of common stock held directly, 700 shares of common stock held by Mr. D. Linde’s wife, 2,100 shares of common stock held by Mr. D. Linde’s children, 700 shares of common stock held through family trusts and 80,0006,429 shares of common stock underlying exercisable stock options. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 56,830 common units held directly and 194,943214,325 LTIP units (of which 77,96164,095 LTIP units are subject to vesting). Excludes OPP Awards. Mr. D. Linde has shared voting and dispositive power with respect to 700 shares of common stock.

(10)	Represents only under the “Number of Shares and Units Beneficially Owned” column, 302 LTIP units (all of which are subject to vesting).

(11)	Includes 415 shares of common stock and 23,392733 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 5,3571,125 LTIP units (of which 1,578823 LTIP units are subject to vesting).

(12)(11)

Includes 3,284415 shares of common stock held directly (of which 434 shares are subject to vesting), 350 shares of common stock held by Mr. Turchin’s wife, 800 shares of common stock held through trusts, 5,779 shares of common stock underlying exercisable stock options and 17,55725,044 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 3,0876,180 LTIP units (of which 1,1441,257 LTIP units are subject to vesting).

(12)

Includes 3,696 shares of common stock held directly (of which 629 shares are subject to vesting), 500 shares of common stock held by Mr. Turchin’s wife, 650 shares of common stock held through trusts, 2,779 shares of common stock underlying exercisable stock options and 17,906 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 845 LTIP units (of which 628 LTIP units are subject to vesting). Mr. Turchin has shared voting and dispositive power with respect to 350500 shares of common stock.

(13)	Includes 4,1307,021 shares of common stock held directly (of which 8681,257 shares are subject to vesting) and 11,20512,631 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 2,068 LTIP units (of which 710 are subject to vesting).

(14)

Includes 48,58732,016 shares of common stock (36,686(22,294 shares of which are subject to vesting) held directly, 18,31729,718 shares of common stock held by a limited partnership (the “RAR LP”) of which Mr. Ritchey and his spouse are the sole limited partners and the sole general partner is a limited liability company of which Mr. Ritchey is the sole membermanager and which is owned by a grantor retained annuity trust of which the Mr. RitcheyRitchey’s spouse is the sole beneficiary and sole trustee, and beneficiary and 65,0585,793 shares of common stock underlying exercisable stock options. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 150,570147,661 common units held directly, 32,000 common units held by the RAR LP, 35,600 common units held by a limited liability company of which Mr. Ritchey is the sole manager and a member, an aggregate of 168,134168,103 common units held by two limited liability companies of which Mr. Ritchey is the sole membermanager and which are each owned by a grantor retained annuity trust of which Mr. Ritchey is the sole trustee and beneficiary and 67,44255,986 LTIP units (of which 38,38137,973 LTIP units are subject to vesting). Excludes OPP Awards.

(15)

Includes 17,166Represents 138 shares of common stock held directly and 73,6991,309 shares of common stock underlying exercisable stock options. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 62,445 common units held directly, 17,816 common units held by a limited liability company of which Mr. Norville is the sole manager and a member and 137,86329,425 LTIP units (of which 60,72613,967 LTIP units are subject to vesting). Excludes OPP Awards.

(16)	Represents 2,387Includes an aggregate of 1,746,229 shares of common stock, (of which 215 shares are subject to vesting). Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 25,068 LTIP units (of which 15,605 LTIP units are subject to vesting). Excludes OPP Awards.

(17)

Includes an aggregate of 1,767,174 shares of common stock, 264,09046,805 shares of common stock underlying exercisable stock options and 73,61380,276 deferred stock units. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, 6,774,1476,722,946 common units and 1,012,090928,766 LTIP units. See also notes (4) — (16)(15) above. Excludes OPP Awards.

(18)(17)

Information regarding The Vanguard Group, Inc. (“Vanguard”) is based solely on a Schedule 13G/A filed by Vanguard with the SEC on February 10, 2011.9, 2012. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates that Vanguard has sole voting power with respect to 174,216205,586 shares of common stock, sole dispositive power with respect to 12,408,82613,932,570 shares of common stock and shared dispositive power with respect to 174,216205,586 shares of common stock.

(19)(18)

Information regarding BlackRock, Inc. (“BlackRock”) is based solely on a Schedule 13G13G/A filed by BlackRock with the SEC on February 3, 2011.13, 2012. BlackRock’s address is 40 East 52nd Street, New York, NY 10022. The Schedule 13G13G/A indicates that BlackRock has sole voting and dispositive power with respect to all of the shares of common stock.

(20)(19)

Information regarding FMR LLCCohen & Steers, Inc. (“Cohen”) and Cohen & Steers Capital Management, Inc. (“Cohen Capital”) is based solely on a Schedule 13G13G/A filed by FMR LLCCohen, Cohen Capital, and Cohen & Steers Europe S.A. with the SEC on February 14, 2011. FMR LLC’s address is 82 Devonshire Street, Boston, Massachusetts 02109.2012. The Schedule 13G indicates that FMR LLCCohen is a holding company and that Cohen Capital and Cohen & Steers Europe S.A. are investment advisors. Cohen’s and Cohen Capital’s address is 280 Park Avenue, New York, New York 10017. The Schedule 13G/A filed by Cohen indicates that (i) Cohen Capital is the beneficial owner of 9,946,419 shares or approximately 6.74% of our outstanding common stock and has sole voting power with respect to 4,536,6114,001,023 shares of common stock and sole dispositiveinvestment power with respect to all9,946,419 and (ii) Cohen Europe S.A. is the beneficial owner of the120,054 shares of common stock.and has sole voting power with respect to 27,300 shares and sole investment power with respect to 120,054 shares.

(21)(20)

Information regarding Vanguard Specialized Funds – Vanguard REIT Index Fund (“Vanguard REIT”) is based solely on a Schedule 13G13G/A filed by Vanguard REIT with the SEC on February 10, 2011.January 27, 2012. Vanguard REIT’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G13G/A indicates that Vanguard REIT has sole voting power with respect to all of the shares of common stock.

(21)

Information regarding FMR LLC and Edward C. Johnson 3d is based solely on a Schedule 13G/A filed jointly by FMR LLC and Edward C. Johnson 3d with the SEC on February 14, 2012. FMR LLC reported sole voting power with respect to 1,211,537 shares and each of FMR LLC and Edward C. Johnson 3d reported sole investment power with respect to the same 7,886,474 shares. FMR LLC and Edward C. Johnson 3d reported that Fidelity Management & Research Company, a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 6,350,516 shares or approximately 4.3% of our outstanding common stock. The address of FMR LLC, Edward C. Johnson 3d and Fidelity Management & Research Company is 82 Devonshire Street, Boston, Massachusetts 02109.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the executive officers and directors of Boston Properties, and persons who own more than ten percent of a registered class of Boston Properties’ equity securities, to file reports of ownership and changes in ownership with the SEC and the New York Stock Exchange. Officers, directors and greater than ten percent beneficial owners are required by SEC regulations to furnish Boston Properties with copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such reports furnished to us and written representations that no other reports were required during the fiscal year ended December 31, 2010,2011, all Section 16(a) filing requirements applicable to our executive officers, directors and greater than ten percent beneficial owners were timely satisfied.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

We seek to attract and retain executives who can help the Company continue our track record of profitability, growth and total return to stockholders. To better align the interests of our executives with those of our stockholders in a pay-for-performance setting, most of each executive’s total compensation is variable through a combination of cash bonus and three different types of long-term equity awards. Every year we compare ourselves against two peerspeer groups: (1) an expanded REIT peer group comprised of 21 public real estate companies across the office, multi-family, shopping centers and diversified sectors, and (2) a selective office REIT peer group comprised of ten11 public REITs specializing in the office sector that more closely resemble our business model. This annual review of executive pay practices helps our Compensation Committee ensure that the range of cash and equity-basedour compensation awards to our executives is in line with that of executives in comparable positions within the peer groups.our peers.

The most material quantitative and qualitative performance factors that the Compensation Committee considered in making 20102011 compensation decisions were:

•

Acquisitions.    The Company successfully pursued acquisitions that should allow for growth and value creation over the long term, including 510 Madison Avenue in New York City, the John Hancock

Tower in Boston, Bay Colony Corporate Centercompleted one acquisition in Waltham, Massachusetts and other keyone in California, while continuing to evaluate acquisitions in Boston, New York City and Washington, D.C. that ultimately did not meet our underwriting criteria.

Our compensation consultant advised the Compensation Committee that (1) based on 20092010 data, total compensation levels for our named executive officers other than the Chief Financial Officer were in most cases, below the desired level relative to the selective office peer group, but generally in line with the Compensation Committee’s target of between the 70th and 85th percentiles of the expandedcombined peer group,groups, (2) total 20102011 compensation for executives of those peer REITs that sustained fundamental and market-based performance at or above peer group averages between 2008 and 2010 werein 2011 was generally expected to increase betweenby 0% to approximately 10% over 2010, with average increases of approximately 5% to 6%, and 15% over 2009 pay levels, (3) increases towards the top of this range could be2012 base salaries were anticipated at companies that decreased compensationto increase by significant amounts from 2007 to 2009 (i.e., by more than 15%) if the company’s fundamental and market-based performance had significantly rebounded, and (4) the portion of long-term compensation earned on the basis of future market-based performance (total return to stockholders) would typically increase through awards of performance-based stock, stock options and/or value creation programs such as outperformance plans.approximately 3%.

Considering their own assessment of the Company’s and individual executives’ performance (including strong relative and absolute TRS performance and bothother quantitative and qualitative performance accomplishments in 2010)2011), our compensation consultant recommended that the Compensation Committee (1) look to increase annual total compensation by approximately 10-15%6% from 2009 to 2010 levels (inclusive of outperformance awards), before taking into consideration changing or expanding roles and responsibilities with respect to individual named executive officers, so as to keep it within the projected 70th and 85th percentiles (or 75th percentile on average) of the combined peer groups for 2011, (2) given that the Company’s 2008 outperformance plan (“2008 OPP”) was duegive an additional increase in total compensation to expireour Chief Financial Officer, in February 2011, implement a new outperformance planrecognition of his additional responsibilities as he transitioned into his role, so as to continue the multi-year process of bringing him up to appropriate peer group levels, and (3) increase base salaries more than the expected increase by the peer groups, as a fourth component ofour named executive officers (other than the Company’s executive compensation program equity-based awards that would reward management for superior value creation over the long term.Chief Financial Officer) had not received an increase in base salary since December 2007 and alignment with peer group levels was justified by changes in individual executives’ roles and responsibilities.

In light of the peer group analysis and the Compensation Committee’s assessment of management’s performance, the Committee concluded that it should continue to target total compensation for our executive officers (other than Mr. LaBelle) in the top quartile of both the expanded and the selective office peer groups. The Compensation Committee noted the Company’s sustained superior performance over the past several years, including (1) strong TRS performance relative to our peers, strong absolute TRS performance (approximately 32% return over the past year, 52% over the past five years and 4% over the past three years despite a challenging economic environment that resulted in negative returns for many of the peer group companies) and (3) a variety of both quantitative and qualitative, performance accomplishmentsthe Committee adopted these recommendations. In addition, in 2010. Theconnection with the resignation of our Chief Operating Officer, E. Mitchell Norville, effective on February 29, 2012, the Compensation Committee also recognized a shiftapproved the terms of his separation agreement, including cash severance payments totaling approximately $1,533,333 (less applicable deductions) in addition to his cash bonus for 2011 of $950,000, compensation of $20,000 per month for consulting services for at least two months, accelerated vesting with respect to 23,502 LTIP units and transition in roles over the past two years, with Mr. Zuckerman assuming the titlestock options to purchase an aggregate of 9,581 shares of common stock, and responsibilitiesretention of CEO after Mr. E. Linde’s passing in early 2010, Mr. D. Linde assuming additional responsibilities as President, and Mr. LaBelle continuing the transition to a seasoned CFO (although the Compensation Committee did not endeavor to set Mr. LaBelle’s compensation at peer group CFO levels dueapproximately 36% of his 2011 outperformance award (which will remain subject to the comparatively short period he has served in that role compared to his peers)original performance-based vesting criteria).

The Compensation Committee does not employ a formula for determining the relationship among the different elements of compensation, but rather seeks to align both total compensation and the relative amounts of base salary, cash bonus and long-term equity incentive compensation with those paid by our peers based on market analysis of competitive pay practices and performance relative to pre-established corporate and individual goals. The Compensation Committee has developed the following basic framework for our named executive officers:

Executive Compensation Objectives

Our executive compensation program is administered under the direction of the Compensation Committee of our Board of Directors. The current members of the Compensation Committee are Messrs. Twardock (Chair), Bacow and Frenkel.

Compensation Consultant.

The Compensation Committee retained FTI Schonbraun McCann Group, real estate advisory practice of FTI Consulting, Inc. (“SMG”FTI”), a nationally recognized consulting firm specializing in the real estate industry.. The Compensation Committee directed SMGFTI to, among other things: (1) assist in developing compensation objectives; (2) analyze trends in compensation in the marketplace generally and among our peers specifically; and (3) recommend the components and amounts of compensation for our executive officers, including awards under a successor program to our 2008 OPP that expired on February 5, 2011.officers. Neither the Compensation Committee nor the Company has retained SMGFTI for any other purpose.

Objectives.

Our executive compensation objectives are:

2011 Advisory Resolution on NEO Compensation.

At our 2011 annual meeting, a non-binding resolution approving the compensation paid to our named executive officers, as disclosed in our proxy statement including the Compensation Discussion and Analysis, compensation tables and narrative discussions, was approved by our stockholders with 95.9% of the votes cast in favor. The Compensation Committee considered the stockholders’ overwhelming support as clear indication they were satisfied with the manner in which we compensated our named executive officers in 2010. Accordingly, the Compensation Committee generally has maintained the structure of our executive compensation programs unchanged for 2011.

Peer Group Analysis

In 2010, SMG2011, FTI conducted a peer group analysis similar to the one they conducted in prior years. In determining the companies to be included in our peer group, SMGFTI considered a number of factors, including historical peer companies, equity market capitalization, geographic location and industry sector. The 20102011 peer group remained unchangedreflected the following changes from 2009.2010: (1) the elimination of AMB Property Corporation as a result of its acquisition by Prologis, Inc.; (2) the elimination of Cousins Properties Incorporated as a result of its no longer being a market comparable; and (3) the addition of Digital Realty Trust, Inc. and Ventas, Inc. as new market comparables. The SMGFTI compensation review was based on information disclosed in the peers’ 20102011 proxy statements, which reported data with respect to fiscal 20092010 (the latest year for which comprehensive data is publicly available), and SMG’sFTI’s proprietary compensation database. SMG’sFTI’s review compared our executive pay practices against both an expanded REIT peer group and a selective office REIT peer group to determine the range of cash and equity-based compensation awarded to executives in comparable positions to our executives in terms of base salary, annual bonus and long-term equity compensation, including awards under outperformance plans (OPP), which have become one of the common elements of executive compensation for many of the REITs in the peer group.groups.

Peer Group Composition.

The more comprehensive peer group, to which we refer in this discussion as the “expanded peer group,” includes the following 21 public real estate companies in various sectors, including office, multi-family, shopping centers and diversified, with equity market capitalizations as of December 31, 20102011 ranging between approximately $720$565 million and $35.1$45.5 billion (with the median being approximately $3.8$4.4 billion compared to our equity market capitalization of approximately $13.7$16.4 billion):

A subset of the first peer group, to which we refer in this discussion as the “selective office peer group,” includes the following teneleven public REITs specializing in the office sector that more closely resemble our business model:

Compensation Consultant’s Conclusions.

SMGFTI provided to the Compensation Committee a detailed analysis of each named executive officer’s compensation, broken down into the different components, compared to the peer groups. FTI advised the Compensation Committee that both the expanded peer group and the selective office peer group generally have compensation programs comparable to ours, with annual bonuses generally in the form of cash and annual long-term compensation generally in the form of equity with time-based vesting over three to five years. In the fall of 2010, SMG presented its analysis of 2009 compensation levels andFTI concluded that total compensation levels for our named executive officers other than the Chief Financial Officer were, in general, at the desired peer group levels, assuming the Compensation Committee’s objective was to place them between the 70th and 85th percentiles of the expandedcombined peer group. Total 2009 compensation was, however, in most cases below the desired level relative to the selective office peer group.groups. The Compensation Committee did not endeavor to set the Chief Financial Officer’s compensation at the same relative levels due to the comparatively short period he has served in that role compared to his peers. The following table illustrates each named executive officer’s 20092010 total compensation (including OPP value) relative to his peers:

SMG advisedThe foregoing table more accurately reflects the annual decisions of the Compensation Committee with respect to our executive officers’ compensation than the Summary Compensation Table presented under “Compensation of Executive Officers.” This primarily results from the fact that, in order to link our annual long-term equity incentive compensation to our annual performance, the componentsCompensation Committee typically awards long-term equity incentive compensation for a particular year in January or February of the Company’sfollowing year. Due to SEC rules governing the presentation of the Summary Compensation Table, we are required to present these grants as compensation structure comparedfor the year in which they were granted (as opposed to the peer groupsyear for which they were earned). As a result, for example, the “Stock Awards” and “Option Awards” granted in January 2010 for 2009 performance are required to be reported as follows:2010 compensation.

Base salaries.FTI also provided to the Compensation Committee comparative data on aggregate 2010 base salariestotal compensation for our named executive officers are generally slightly belowfor the desired peer group levelsCompany and its peers, both in absolute amount and as a percentage of implied equity market capitalization, which can be summarized as follows:

Annual bonuses.    Current bonuses for our named executive officers are discretionary with actual amounts determined by the Compensation Committee contingent upon corporate and individual performance. Annual bonuses for 2009 generally placed our named executive officers in the 50^th to 75^th percentiles, with exception of Mr. LaBelle who was below the 25^th percentile, for both sets of peer groups.

Long-term compensation.    Long-term compensation for 2009 generally placed our named executive officers between the 70^th and 80^th percentiles of the expanded peer group and between the 50^th and 60^th percentiles of the selective office sector peer group, with the exception of Mr. LaBelle who was below the 25^th percentile for both sets of peer groups.

Compensation Consultant’s Analysis of Industry Trends.

SMG gave the Compensation Committee adviceBased on anticipated 2010 compensation adjustments in the REIT industry based on SMG’s conversations withFTI’s role advising other REIT compensation committees, discussions with REIT executives and information shared through cooperation with other consulting firms, as follows:

Total annualFTI advised the Compensation Committee that (i) total 2011 compensation.    Companies for executives of those peer REITs that sustained fundamental and market-based performance at or above peer group averages from 2008-2010 werein 2011 was generally expected to typically increase compensation levels by 0% to approximately 5-15% as 2009 pay levels were generally market appropriate. However, companies that decreased compensation by significant amounts from 200710% over 2010, with average increases of approximately 5% to 2009 (i.e.6%, by more than 15%) were expected to generally increase compensation levels by an additional 5-10% on average if the company’s fundamental and market-based performance had significantly rebounded. REITs were expected to continue to utilize a pay-for-performance structure for their senior management teams and to increase the portion of long-term compensation earned on the basis of future market-based performance (total return to stockholders) through awards of performance-based stock, stock options and/or value creation programs such as outperformance plans.

Base salaries.    Except in select circumstances such as promotions, substantial changes in responsibilities and/or current salaries significantly below market,(ii) 2012 base salaries were expectedanticipated to be relatively flat with 0-3% increases year over year.

Annual bonuses.    Annual cash bonuses were expected to typically increase by approximately 5-10% depending on each REIT’s fundamental performance, liquidity position and actual 2008 to 2009 cash bonus adjustments.3%.

Long-term compensation.    Long-term compensation was expected to typically increase by approximately 5-15%, with a substantial portion of the increase expected to be in the form of equity awards tied to future market-based performance and annual time-based restricted stock awards expected to remain relatively flat.

Compensation Consultant’s Considerations Specific to the Company.

SMG pointed toFTI recognized the Company’s strong performance in terms of total return to stockholdersTRS relative to its selective office peers, as well as strong absolute total return to stockholdersearnings performance, with an approximate 32% return over the past year (90th percentile)balance sheet management and an approximate 52% return over the past five years (100th percentile), despite a challenging economic environment that resulted in negative returns for many of the peer group companies. SMG also pointed to bothother quantitative and qualitative performance accomplishmentsgoals in 2010,2011, which the Compensation Committee evaluated as discussed in detail under ““Compensation Committee’s Evaluation of Management’s Performance”Performance” below. FTI also noted that, given the Company’s stellar performance in terms of TRS relative to peers, the aggregate 2010 total compensation for the Company’s named executive officers compared favorably to peers as a percentage of equity market capitalization. Moreover, SMGFTI recognized a shift and transition inthe evolving roles over the past two years, withof Mr. Zuckerman assuming the title and responsibilities ofas CEO, after Mr. E. Linde’s passing in early 2010, Mr. D. Linde assuming additional responsibilities as President, and Mr. LaBelle continuing the transition to a seasonedas CFO.

As a result of the Company’s sustained superior performance over the past several years, SMG FTI recommended that the Compensation Committee (1) look to increase annual total compensation by approximately 10-15%6% from 2009 to 2010 levels (inclusive of outperformance awards)OPP Awards), before taking into consideration changing or expanding roles and responsibilities with respect to individual named executive officers. Noting thatofficers, so as to keep it within the 2008 OPP was dueprojected 70th and 85th percentiles (or 75^th percentile on average) of the combined peer groups for 2011, (2) give an additional increase in total compensation to expire in February 2011, SMG suggested that the Compensation Committee implement a new outperformance planMr. LaBelle so as to continue the multi-year process of bringing him up to appropriate peer group levels, and (3) increase base salaries more than the expected peer groups, as a fourth componentno adjustments had been given for several years (except in the case of the Company’s executive compensation program equity-based awards that would reward managementMr. LaBelle) and for superior value creation over the long term.Messrs. Zuckerman and Linde further alignment with their peer group levels was justified by their respective roles.

Compensation Committee’s Evaluation of Management’s Performance.

The Compensation Committee received information from both SMGFTI and management on both corporate and individual accomplishments to assist it in conducting its assessment of management’s performance in 2010.

SMGFTI compared our historical total returnsreturn to stockholders (including share appreciation and dividends) to the comparable total returns of the peers for 20102011 and the latest three-, five-, and five-yearten-year periods, and also analyzed comparative data for the various roles and responsibilities of individual executives at the Company and at peer companies. The Committee received input from Messrs. Zuckerman D. Linde and Norville.Linde. In addition the Committee had access to each officer’s self-assessment of his performance against pre-established goals.

The most material quantitative and qualitative performance factors that the Compensation Committee considered in making 20102011 compensation decisions were:

Total return to stockholders.    The Company’s total return to stockholders (“TRS”),TRS, including our rank relative to the expanded and selective office peer groups, was as follows:

The Compensation Committee focused particularly on our TRS performance over the last ten and five years of 345.65% and 10.30%, which ranked us first and second, respectively, within the selective office peer group, whose average TRS for the same periods was 134.86% and -16.94%. Over the same periods, the TRS for the entire SNL REIT Index was 175.35% and -3.91%, while the average TRS for the expanded peer group was 178.26% and -16.80%. As was the case for 2009 compensation decisions,past years, the Compensation Committee focused particularly on our total return to stockholders performanceTRS over the five-year period (approximately 52%), which placedbecause of our focus on creating value over the Company at approximately the 90th percentilelong term, but also took special note of the expanded peer group and 100th percentileCompany’s stellar performance (#1 ranking) over the past ten years. This remarkable performance reflects the highly volatile environment of the selective office peer group. That is consistent not only with the reality of a very volatile environment in 2009last several years and 2010, but also withreinforces our commitment to the core elements of our long-held strategy of:strategy: (1) developing, acquiring, owningto develop, acquire, own and self-managingself-manage the highest quality, iconic office buildings in premier locations in supply-constrained markets with high barriers to entry, which over the long term should result in higher relative rental rates and appreciation of property values; (2) concentratingto concentrate on longer term leases with tenants of strong financial standing to enhance the quality and stability of our rental income; and (3) keepingto keep the average maturity of our debt financing generally in line with the longer term nature of our assets to reduce our exposure to interest rate volatility, as well as the risk of having to refinance significant maturities in the face of adverse conditions in the credit markets.

Earnings performance.     The Company’s 2011 FFO was $4.84 per share diluted, which significantly exceeded the top of our guidance range ($4.60 per share) given at the beginning of the year. Our strong performance was driven by stronger than projected performance of our operating portfolio, higher fee income, and favorable financing terms. 2011 FFO included charges of $0.05 per share attributable to our decision to make a long-term funding commitment in the fourth quarter for the early repayment of 2012 debt maturities and the short-term dilutive impact of acquisitions, debt repurchases and other actions undertaken with the approval of the Board of Directors.

Management of the balance sheet.    Given favorable equity capital markets conditions, the recent low interest rate environment, and the opportunity to further enhance our capital position and elongate our debt maturity schedule, management continued to strengthen the balance sheet in 2010,2011, including the following key accomplishments:

Earnings performanceLeasing.    The Company’s 2010 funds from operations (“FFO”) were $3.90 per share, which reflected our Board’s decision to make a long-term funding commitment in the fourth quarter for the early refinancing of a significant portion of our 2012 and 2013 debt maturities, which resulted in charges of $0.50 per share. Excluding these charges, 2010 FFO would have significantly exceeded our goal set at the beginning of the year: the mid-point of our guidance range ($4.10 to 4.25 per share) after adjusting for asset acquisitions and dispositions, changes in capitalization, impairment charges and other items that are excluded from guidance because they cannot be anticipated. 2010 FFO was also adversely impacted by other capital structure changes, including a bond offering in April 2010 and other exchangeable debt repurchases.

Percentage leased.    The overall percentage of leased space for the 140 properties in service as of December 31, 2010 was 93.2%, which exceeded our goal of 91.2%, reflecting among other achievements the successful leasing of space left vacant in New York City resulting from the bankruptcies of Lehman Brothers and General Motors.

Leasing.    In total, the Company completed more than 6.55.0 million square feet of leasing in 2010,2011, exceeding our speculative leasing goal of 5.14.5 million square feet. We exceeded our projections in Washington DC, San Francisco and Princeton. Although in Boston we did not meet our rollover or vacant space leasing targets, we completed a development build-to-suit project that put us near our overall leasing plan goal. In New York, we did not hit our leasing targets, but we did secure a major tenant for our 989,000 square foot development at 250 West 55^thStreet.

Same Store Cash NOI.     In light of economic conditions, the Company’s corporateOur goal was to limit the likely decrease inincrease same store net operating income on a cash basis from 2009 to 2010 to no more than 3.5%2011 by approximately 5% to 6%. The Company exceeded this goal by limiting the decreaseincreasing same store cash NOI 6.5% by year over year.

Management of G&A and capital expenditures.    The Company kept G&A expenses (including our San Francisco and Princeton regional G&A expenses) to $88.8 million, as compared to a budgeted goal of $89.2 million, and also managed capital expenditures to approximately 2.4%.$37 million (including non-recurring capital expenditures from recent acquisitions), as compared to our budget of $40 million.

Acquisitions.    The Company successfully pursued acquisitions that should allow for growth and value creation over the long term, including 510 Madison Avenue in New York City, the John Hancock Tower in Boston, Bay Colony Corporate Centercompleted one acquisition in Waltham, Massachusetts and other keyone in California, while continuing to evaluate acquisitions in Boston, New York City and Washington, D.C. that ultimately did not meet our underwriting criteria.

Dividends.    In lightDecember 2011 our Board of SMG’sDirectors increased our quarterly dividend by 10% to $0.55 per share, or $2.20 on an annualized basis.

On February 13, 2012, we announced that our Chief Operating Officer, E. Mitchell Norville, would resign effective on February 29, 2012 to relocate from the Boston area and explore various personal and professional opportunities. On February 13, 2012, the Compensation Committee approved a separation agreement with Mr. Norville that provides for: (1) cash payments totaling approximately $1,533,333 (less applicable deductions) in addition to his cash bonus for 2011; (2) compensation of $20,000 per month for consulting services to the Company for at least two months following the effective date of his resignation; (3) accelerated vesting with respect to 23,502 LTIP units and stock options to purchase 4,464 shares of common stock at an exercise price of $92.71 and 5,117 shares of common stock at an exercise price of $104.47; (4) retention of approximately 36% of his 2011 outperformance award, which will remain subject to the performance-based vesting criteria originally established for 2011 OPP Awards; (5) a one-year non-competition, non-solicitation and non-interference covenant; and (6) a general release of claims.

Based on peer group analysis and the Compensation Committee’s assessment of management’s performance, the Compensation Committee concluded that it should continue to target total compensation for our executive officers (other than Mr. LaBelle) in the top quartile of both the expanded and the selective office peer groups and approved the following total compensation for each named executive officer for 2010:2011:

In addition to the Company’s overall corporate performance, both in absolute terms and relative to peers, and an analysis of each named executive officer’s compensation relative to his peers as discussed above, in determining total compensation for each officer for a given year the Compensation Committee generally considers a number of factors on a subjective basis, including (i) the scope of the officer’s responsibilities within the Company and in relation to comparable officers at various companies within the peer groups; (ii) the experience of the officer within our industry and at the Company; (iii) performance of the officer and his contribution to the Company; (iv) the Company’s financial budget and general level of wage increases throughout the Company for the coming year; (v) a review of historical compensation information for the individual officer; (vi) a subjective determination of the compensation needed to motivate and retain that individual; and (vii) the recommendations of the Compensation Committee’s consultant. The Company does not have specific, proportionate ratios to define the relative total compensation among individual named executive officers, although the Compensation Committee from time to time does review the relationship in pay between executive officers to assure that relative compensation levels are appropriate and are designed to effectively motivate and retain executives. The Compensation Committee focused principally on our overall corporate performance in setting compensation goals for ourmakes its own assessment of each named executive officers as a group based on peer group analysis. In addition to assessing the senior executive team’s overall contribution to corporateofficer’s performance the Compensation Committee receivedand receives feedback from Messrs. Zuckerman and Linde on the individual performance of the other named executive officers, as well as feedback from Mr. Zuckerman on Mr. Linde’s individual performance. The Committee was satisfied with each named executive officer’s performance against both general expectations and pre-established goals and factored individual assessments into 2010 compensation decisions for each of the

various components of compensation. The Compensation Committee’s determination of compensation levels for individual named executive officers took into account job descriptions, years of experience, leadership roles and historical and expected contribution to different aspects of our business within their respective areas of responsibility. The Compensation Committee does not have a policy of setting compensation tiers for executives or a formula to limit the compensation of any one named executive officer relative to another or to categories of employees.goals.

From time to time, the Compensation Committee requests and receives from SMGFTI detailed information for named executive officers regarding equity ownership value and dividend income relative to total compensation, the value of vested and unvested equity securities and amounts realized and realizable upon exercise of stock option awards, as compared to comparable executives within the expanded and selective office peer groups. This information, however, did not affect the Compensation Committee’s 20102011 compensation decisions.

Elements of Executive Compensation

The principal compensation elements used for our executives are:

Other compensation elements used for our executives include:

The Compensation Committee does not employ a formula for determining the relationship among the different elements of compensation but rather seeks to align both total compensation and the relative amounts of base salary, cash bonus and long-term equity incentive compensation with those paid by our peers based on market analysis of competitive pay practices and performance relative to pre-established corporate and individual goals. The Compensation Committee has developed the following basic framework for our named executive officers:

Base Salaries for 20112012

Base salaries are set for executive officers on the basis of assigned responsibilities and reviewed and adjusted periodically. SMG comparative data showedFTI recommended that 2012 base salaries forbe increased more than the expected increases by peers in light of the fact that our named executive officers are generally slightly below ranges for comparable officers within both the expanded and the selective office peer groups. Nevertheless, SMG recommended that 2010 base salaries remain unchanged, with the exception of Mr. LaBelle, to emphasize the Company’s pay-for-performance philosophy. Our named executive officers, other than Mr. LaBelle, havehad not received an increase in base salary since January 2007.2007 and alignment with peer group levels was justified by changes in individual executives’ roles and responsibilities. Based on the foregoing, on January 20, 201125, 2012, the Compensation Committee approved base salaries for 20112012 as follows:

Annual Cash Bonuses for 20102011

Early each year our Compensation Committee, based upon the overall corporate strategy outlined by the Board of Directors and discussions with management, establisheswe establish performance goals for the management team as a whole and for each of our executive officers. The principal focus ofofficer and the Compensation Committee inevaluates the performance of senior management after the end of the year. In setting annual incentive compensation (both cash bonuses and long-term equity awards) for our named executive officers as a group isthe Compensation Committee focuses principally on corporate goals and achievements. In addition, the Compensation Committee reviews individual performance against quantitative and qualitative goals relevant to each officer’s specific duties and responsibilities. The current design of our bonus program is such that quantitative goalsGoals established at the beginning of the year may change due to opportunistic activitiestransactions and changed circumstances during the year. After the end of the year, the Compensation Committee evaluates the performance of senior management. Performance relative to individual goals cannot always be measured objectively and the Compensation Committee may choose to emphasize some goals over

others. In the end, the Compensation Committee makes an overall assessment of each executive’s effectiveness as a manager. No specific formamount or type (i.e., cash bonus, stock options or long-termfull-value equity awards) or amount of compensation is directly associated with meeting any one or more of the individualspecific goals. The Compensation Committee evaluates performance in a fully discretionary framework to set cash bonuses and annual long-term equity awards within the ranges established on the basis of competitive pay data for our peers.peers as discussed above.

Based on the foregoing, on January 20, 201125, 2012, the Compensation Committee approved the following cash bonuses for 2010:2011:

Annual Long-Term Equity IncentivesIncentive Awards for 20102011

Annual long-term equity incentive awards to named executive officers for 20102011 consisted of an amount determined by the Compensation Committee based on the same goals and assessments relevant to the Compensation Committee’s decision to pay cash bonuses. These awards were granted 75% in the form of full-value equity awards (restricted stock or LTIP units, or a combination of both, at the recipient’s election) and 25% in the form of at-the-market stock options with a ten-year term. The Compensation Committee believes that this combination providessupports the use of stock options and full-value equity awards because they have a strong retentive feature both during vesting and (in the case of options) after vesting, provide a strong incentive to maximize company performance and keep our named executivecompensation programs competitive with our peers. A greater percentage of the dollar value is allocated to full-value equity awards because they retain their value (and thus retentive feature) even if our stock price declines, deliver a current and immediate return to officers, and thus are viewed as an important part of compensation, and provide immediate exposure to the effect of a decline in stock price, thus aligning the interests of officers with long-termour stockholders in protecting, as well as enhancing, equity incentive compensation that is better aligned with the achievement of enhanced value for stockholders.value. Both full-value awards and stock options vest over four years (25% on January 15 of each of the four years after the date of grant). Vesting accelerates for executives, other than Mr. Zuckerman, who are (1) over the age of 62 with at least 20 years of service with us or (2) over the age of 65. Each of our named executive officers elected to receive his grant of full-value equity awards in the form of LTIP units.

The following table sets forth the combined value of the LTIP unit and stock option awards to our named executive officers approved on January 20, 201125, 2012 for 2010:2011:

Pursuant to our Equity Award Grant Policy discussed below, except for Mr. Norville’s awards, LTIP unit awards were issued as of the close of business on January 28, 2011February 3, 2012 based on the closing price of our common stock on the New York Stock Exchange on that date ($92.71)107.57) in the following amounts:

Pursuant to our Equity Award Grant Policy discussed below, except for Mr. Norville’s awards, stock options were issued as of the close of business on January 28, 2011February 3, 2012 at an exercise price of $92.71$107.57 per share, the closing price of our common stock on thehe New York Stock Exchange on that date in the following amounts:

20112012 Outperformance Awards

InStarting in 2008, the Compensation Committee implemented a long-term incentive plan designedan “outperformance plan” or “OPP” as a fourth element of our executive compensation program designed to provide officers and key employeesour management team at several levels with the potential to earn significant equity awards subject to our achieving superior performance. This kind of program, generally referred to as an “outperformance plan” or “OPP,” is commonthe Company creating shareholder value in the REIT industry and in several cases between 2004 and 2007 resulted in significant rewards being earned by the management teams of several of the Company’s closest peers.a pay-for-performance structure. Recipients of 2008 OPP awards were eligibleAwards have the opportunity to share in an up to $110 million outperformance pool if our total return to stockholders (“TRS”), including both share appreciation and dividends, exceeded absolute and relative hurdles over the period from February 5, 2008 to February 5, 2011. As a result of the significant decrease in REIT share prices in 2008 and 2009 due to the impact of the global recession, recipients of 2008 OPP awards did not earn any rewards as of the expiration of the plan.

The Compensation Committee decided to retain OPP awards as a fourth component of executive compensation. The Committee noted, however, that making outperformance awards only once every three years makes this kind of program unnecessarily dependent on the timing of adoption and market conditions over a particular period, as evidenced by the Company’s 2008 OPP awards that were made at the start of a period during which unique market conditions prevailed. As a result of the unique circumstances between early 2008 and late 2010, 2008 OPP awards lost their incentive value very quickly as our stock price declined precipitously and never regained value, even though our stock price rebounded rapidly in 2009 and 2010, reaching $93.34 per share on February 4, 2011 (the last trading day before the end of the performance measurement period), which outperformed our peers on a relative basis. Thus, although we continued to record significant compensation expense and outperformed our peers in terms of relative TRS over the term of the plan, the 2008 OPP did not provide any value to our employees because we did not meet the minimum absolute TRS threshold of 10% per year over the plan’s three-year life. Accordingly, with advice from SMG, the Compensation Committee decided to design the Company’s new outperformance program as a series of smaller, annual plans, each with a three-year performance measurement period plus two years of time-based vesting, rather than a much larger, once-every-three-years program like the 2008 OPP. The combined effect of smaller, annual OPP awards and overlapping three-year performance measurement periods should be to provide more efficient incentives for management and more consistent reporting of annual compensation amounts, while at the same time mitigating potential timing issues associated with large multi-year outperformance awards. As a general matter the new OPP design retained the same relative value, as compared to other elements of our executive compensation program, as the 2008 OPP and the same basic framework of measuring both absolute and relative TRS performance over a three-year period.

On January 20, 2011, the Compensation Committee approved outperformance awards entitling recipients to share in a pool of up to $40 million if the Company’s TRS, including both share appreciation and dividends, exceeds absolute and relative hurdles over a three-year measurement period, with two years of time-based vesting after the end of the measurement period (subject to acceleration in certain events). Annual awards with overlapping performance periods provide better long-term incentives to management and more consistency for us than the large multi-year outperformance awards some other REITs use.

On January 25, 2012, the Compensation Committee approved 2012 OPP Awards with a measurement period from February 1, 20117, 2012, to January 31, 2014, based on theFebruary 6, 2015. The baseline share price for these awards was $106.694 (the average closing price of a share of our common stock of $93.38 (the averageon the New York Stock Exchange for the five trading days prior to and including February 1, 2011). 7, 2012) and the maximum aggregate award that recipients of all 2012 OPP Awards can earn is $40 million. The Company expects that under the Financial Accounting Standards Board’s Accounting Standards Codification 718 “Compensation – Stock Compensation” (“ASC Topic 718”) the 2012 OPP Awards will have an aggregate value of approximately $7.7 million, which amount will be amortized into earnings over the five-year plan period under the graded vesting method.

The outperformance pool will consist of (i) two percent (2%) of the excess total return above a cumulative absolute TRS hurdle of 27%

24% over the full three-year measurement period (equivalent to 9%8% per annum) (the “Absolute TRS Component”) and (ii) two percent (2%) of the excess or deficient excess total return above or below a relative TRS hurdle equal to the total return of the SNL Equity REIT Index over the three-year measurement period (the “Relative TRS Component”). In the event that the Relative TRS Component is potentially positive because ourthe Company’s TRS is greater than the total return of the SNL Equity REIT Index, but we achievethe Company achieves a cumulative absolute TRS below 27%24% over the three-year measurement period (equivalent to 9%8% per annum), the actual contribution to the outperformance pool from the Relative TRS Component will be subject to a sliding scale factor such thatas follows: (i) 100% of the potential Relative TRS Component will be earned if the Company’s TRS is equal to or greater than a cumulative 24% over three years, (ii) 0% will be earned if the Company’s TRS is negative0% or less, and (iii) a percentage from 0% to 100% calculated by linear interpolation will be earned if the Company’s cumulative TRS over three years is between 0% and 27%24%. For example, if we achievethe Company achieves a cumulative absolute TRS of 18% over the full three-year measurement period (equivalent to a 6% absolute annual TRS), the potential Relative TRS Component would be prorated by 66.67%75%. The potential Relative TRS Component before application of the sliding scale factor will be capped at $40 million. In the event that the Relative TRS Component is negative because the Company’s TRS is less than the total return of the SNL Equity REIT Index, any outperformance reward potentially earned under the Absolute TRS Component will be reduced dollar for dollar, provided that the potential Absolute TRS Component before reduction for any negative Relative TRS Component will be capped at $40 million. The algebraic sum of the Absolute TRS Component and the Relative TRS Component determined as described above will never exceed $40 million. The aggregate value of the 2011

Each executive’s 2012 OPP awards was calculated as of the effective date of grant by an independent valuation expert in accordance with Accounting Standards Codification 718 “Compensation – Stock Compensation” (“ASC Topic 718”) at approximately $7.8 million, which amountAward will be amortized into earnings over the five-year term of the program under the graded vesting method. In connection with future annual OPP awards, the Compensation Committee expects to review the design features and performance hurdles to determine if adjustments are appropriate in light of then-existing market conditions.

2011 OPP awards were designated as a specified percentage of the aggregate outperformance pool, if any, calculatedpool. Assuming the applicable absolute and/or relative TRS thresholds are achieved at the end of the measurement period. Rewardsperiod, the algebraic sum of the Absolute TRS Component and the Relative TRS Component will be calculated and then allocated among the 2012 OPP Award recipients in accordance with each individual’s percentage. 2012 OPP Awards were in the form of LTIP units issued on February 7, 2012, using an estimate of the maximum number of LTIP units that could be earned, with respectbased on certain assumptions, subject to 2011 OPPforfeiture depending on the extent of awards actually earned. The number of LTIP units actually earned by each award recipient will be determined at the end of the three-year measurement period by dividing his or her percentage of the outperformance pool by the average closing price of a REIT Share for the 15 trading days immediately preceding the measurement date. LTIP units earned will vest 25% on February 1, 2014,7, 2015, 25% on February 1, 2015,7, 2016, and 50% on February 1, 2016,7, 2017, based on continued employment. Vesting will be accelerated in the event of a change inof control of the Company, termination of employment by the Company without cause, termination of employment by the award recipient for good reason, death, disability or retirement, although restrictions on transfer will continue to apply in certain of these situations. 2011 OPP awards were in the form of LTIP units issued on February 1, 2011 subject to forfeiture depending on the extent of rewards earned at the end of the measurement period. The aggregate number of LTIP units issued to recipients of the 2011 OPP awards was an estimate of the maximum number of LTIP units that they could earn, based on certain assumptions. The number of LTIP units actually earned by each award recipient will be determined at the end of the performance measurement period by dividing his or her share of the outperformance pool by the average closing price of a share of our common stock for the 15 trading days immediately preceding the measurement date. Our TRS and the TRS for the SNL Equity REIT Index over the three-year measurement period and other circumstances will determine how many LTIP units are earned by each recipient; if they are fewer than the number issued initially, the balance will be forfeited. Prior to the measurement date, LTIP units issued on account of 2011 OPP awards will be entitled to receive per unit distributions equal to one-tenth (10%) of the regular quarterly distributions payable on a common unit of limited partnership interest in ourthe Operating Partnership, (a “Common Unit”), but will not be entitled to receive any special distributions. After the measurement date, the number of LTIP units earned, both vested and unvested, which 2011 OPP award recipients have earned based on the establishment of an outperformance pool, will be entitled to receive distributions in an amount per unit equal to distributions, both regular and special, payable on a Common Unit.common unit.

The following table sets forth the 20112012 OPP awardsAwards made to our named executive officers:

Equity Award Grant Policy

Under our Equity Award Grant Policy, our annual grants are approved at a meeting of our Compensation Committee held onin or around the third or fourth week of January each year. Beginning in 2007, theThe policy specifies the effective grant date for such awards as immediately following the closing of the New York Stock Exchange on the second trading day after the Company publicly releases its financial results for the prior year. We believe the newthis policy provides increasedthe necessary certainty and transparency for both employees and investors, while allowing the Compensation Committee the necessary flexibility in making decisions consistent with our past practices.desired flexibility.

Our Compensation Committee approves equity awards in dollar values. To the extent these awards are paid in the form of full-value awards (either shares of restricted stock and/or LTIP units), the number of shares/units granted is calculated by dividing the dollar value of the approved awards by the closing market price on the New York Stock Exchange of a share of our common stock on the effective date of grant. To the extent these awards are paid in the form of stock options, the number of shares underlying option grants is determined by dividing the dollar value of the approved awards by the fair value of a ten-year option with the exercise price equal to the closing market price on the New York Stock Exchange of a share of our common stock on the effective date of grant, as calculated by an independent valuation expert in accordance with ASC Topic 718 using assumptions approved by the Compensation Committee.

The Equity Award Grant Policy did not apply to 20112012 OPP awards. Because the 2011 OPP awardsAwards because they are not “full-value” awards immediately upon issuance and only havetheir value if certaindepends on our future TRS thresholds are satisfied based on performance above an initial baseline value,and the Compensation Committee determined that the baseline valueshare price should be based on a five-day trading average. See ““20112012 Outperformance Awards”Awards” above.

LTIP Units

Since 2003 we have used a class of partnership interests in our Operating Partnership, called long term incentive units, or LTIP units, as a form of equity-based award for annual long-term incentive equity compensation. LTIP units are designed to qualify as “profits interests” in the Operating Partnership for federal income tax purposes, meaning that initially they are not economically equivalent in value to a share of our common stock, but over time can increase in value to one-for-one parity with common stock by operation of special tax rules applicable to profits interests. LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them to enjoy a more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under the 1997 Stock Plan, reducing availability for other equity awards on a one-for-one basis. We also used LTIP units for 2011 and 2012 OPP awards.Awards.

LTIP units issued in connection with annual full-value equity awards (i.e., excluding 2011 and 2012 OPP awardsAwards until and unless they have been earned based on performance), whether vested or not, receive the same per unit distributions as common units of our Operating Partnership, which equal per share dividends (both regular and special) on our common stock. This treatment with respect to distributions is analogous to the treatment of restricted stock.

The key difference between LTIP units and restricted stock is that at the time of award, LTIP units do not have full economic parity with common units, but can achieve such parity over time upon the occurrence of specified events. This accretion to parity is driven by partnership tax rules and basically hinges on the circumstance under which LTIP units would become entitled to receive distributions upon a hypothetical liquidation of our Operating Partnership, such that executives will have the right to require our Operating Partnership to redeem their LTIP units at a value equivalent to that of an equal number of common units. Both the liquidation value and the redemption value of LTIP units are based on the book capital account associated with such units for tax purposes. Generally, the book capital account associated with LTIP units when they are initially issued is close to zero, while the book capital account associated with common units is equal on a per unit basis to the price per share of the Company’s common stock. Economic parity is reached when the book capital account of the LTIP units has grown, through special allocations of unrealized or realized gain, to be equal to that of an equal number of common units. Events that allow such special allocations under the partnership agreement and applicable federal tax regulations include: (1) the issuance by the Company of common stock, (2) the issuance by our Operating Partnership of common or other partnership units, (3) significant repurchases of common stock for cash, and (4) the redemption by the Company of common units for cash or other property, in each case so long as the price of the Company’s common stock at the time is greater than the price on the date on which the LTIP units were initially issued. If capital account parity with common units is reached, vested LTIP units become convertible into an equal number of common units. Until and unless such parity is reached, the value that an executive will realize for a given number of vested LTIP units is less than the value of an equal number of shares of our common stock.

LTIP units are awarded in the alternative to restricted stock. One key disadvantage of restricted stock is that executives are generally taxed on the full market value of a grant at the time of vesting, even if they choose to hold the stock. As a result, executives may need to sell a portion of their vested shares to pay taxes on their restricted stock awards from prior years. Conversely, an executive who received LTIP units would generally be taxed only when he or she chooses to liquidate his or her LTIP units, rather than at the time of vesting.

Our Compensation Committee believes that using LTIP units for equity-based awards (1) serves our objectives by increasing the after-tax value of a given equity grant and, therefore, enhances our equity-based compensation package for executives as a whole, (2) advances the separate goal of promoting long-term equity ownership by executives (see “Mandatory Minimum Equity Ownership Policy for Senior Executives” below), (3) has no adverse impact on dilution as compared to using restricted stock, (4) does not increase our recorded expense on account of equity-based compensation awards, (5) further aligns the interests of executives with the interests of stockholders and (6) because LTIP units are offered by many of its peers, it enables the Company to remain competitive with its peers in recruiting and retaining talented executives. Based on these considerations, we offer eligible officers and employees a choice between restricted stock and LTIP units on a one-for-one basis for their time-based, long-term equity compensation awards and have used LTIP units for 2011 and 2012 OPP awards.Awards. All of the named executive officers satisfy this requirement.

Mandatory Minimum Equity Ownership Policy for Senior Executives

Our Compensation Committee has always believed that it is important to align the interests of those in senior management positions with those of our stockholders. As one concrete step to ensure such alignment, on January 16, 2003, the Compensation Committee adopted a mandatory stock ownership requirement for senior management. Under this policy all executive vice presidents (and positions senior thereto) must achieve minimum equity ownership equal to three times their annual base salary and all senior vice presidents must achieve minimum equity ownership equal to two times their annual base salary, and then maintain such ownership during their continuing employment. Those persons who were senior executives on January 16, 2003 had until January 1, 2008 to achieve this ownership requirement, while those who were or may be hired or promoted to senior management positions after January 16, 2003 will have a five-year period beginning on January 1 of the year following their appointment. Exceptions may be made for significant extenuating personal circumstances. The types of securities that will be counted toward the equity ownership requirement include

shares of our common stock, restricted stock, units of limited partnership interest of our Operating Partnership

and LTIP units (excluding those issued on account of 2011 and 2012 OPP awards,Awards, until and unless they have been earned based on performance), in each case both vested and unvested, and shares acquired and held through our stock purchase and dividend reinvestment plans. Stock options will not be counted. Our goal in imposing this stock ownership requirement is to demonstrate to our stockholders and the investment community that our senior management is personally committed to our continued financial success.

Employment Agreements

We have employment agreements (see ““Potential Payments Upon Termination or Change in Control”Control” below) with each of our named executive officers. These agreements provide for a certain level of severance, generally the sum of base salary plus the prior year’s cash bonus, 12 additional months of vesting in equity-based awards and participation in our health plan for up to 12 months, in the event of a termination of employment by us without cause or by the executives for good reason. In return, each executive agrees, during the term of employment and for one year thereafter, not to compete with us, solicit our tenants or employees or interfere with our relationship with our tenants, suppliers, contractors, lenders, employees or with any governmental agency. We believe that these agreements are fair to the executives and to our stockholders because these agreements provide relatively modest severance in exchange for the negative covenants which protect us. Further, because the severance level is negotiated up front, it makes it easier for our Board to terminate executives for performance reasons without the need for protracted negotiations over severance.

Change in Control Arrangements

We also have an agreement with Mr. Zuckerman to provide him with certain severance benefits in the event of his termination under certain circumstances within 24 months following a “change in control.” (See ““Potential Payments Upon Termination or Change in Control”Control” below for further details.) We also have two change in control severance plans, one for our President, Executive Vice Presidents, the Chief Financial Officer and the Regional Office Heads, and the other for our Senior Vice Presidents and those Vice Presidents with ten (10) or more years of tenure with us. These plans also provide severance benefits in the event of termination of employment under certain circumstances within 24 months following a “change in control.” In all instances, these are “double trigger” arrangements, providing severance benefits only upon involuntary termination or constructive termination of the executive officer. (See ““Potential Payments Upon Termination or Change in Control”Control” below for further details.) Under our 1997 Stock Plan, all equity awards become fully vested upon a change in control. In our experience, change in control protection for executive officers is common in the REIT industry. Our Compensation Committee believes it is fair to provide severance protection and accelerated vesting of equity grants upon a change in control. Very often, senior managers lose their jobs in connection with a change in control. By agreeing up front to provide severance benefits and accelerated vesting of equity grants in the event of a change in control, our Compensation Committee believes we can reinforce and encourage the continued attention and dedication of senior management to their assigned duties without distraction in the face of an actual or threatened change in control and ensure that management is motivated to negotiate the best merger consideration for our stockholders.

Our change in control arrangements also provide for a tax gross-up payment to our named executive officers and other executives covered in the two severance plans described above in the event they become subject to the 20% golden parachute excise tax. We agreed to this payment because at the time of adoption of these plans in 1998 it was market practice in the REIT industry and because our Compensation Committee believed that our management team should be able to receive what it bargained for without being subject to this tax.

Perquisites

We provide a car and a full-time driver for the use of Mr. Zuckerman, our Chairman and Chief Executive Officer. This allows our Chairman to use his time efficiently for business purposes during his travel time. The

cost to the Company for the car and driver in 20102011 was $206,795.$261,113. For Messrs. D. Linde Norville and Ritchey, we provide a monthly car allowance of $750, as we did for Mr. Norville prior to his resignation, and we provide all of our executive officers a designated parking space. Apart from these arrangements, we do not provide any other perquisites to our executive officers.

Deferred Compensation Plan

We offer a deferred compensation plan that enables our executives to defer a portion of their base salaries and bonuses. The amounts deferred are not included in the executive’s current taxable income and, therefore, are not currently deductible by us. The executives select from a limited number of mutual funds which serve as measurement funds, and the deferred amounts are increased or decreased to correspond to the market value of the mutual fund investments. Because the measurement funds are publicly traded securities, we do not consider any of the earnings credited under the deferred compensation plan to be “above market.” We do not provide any matching contribution to any executive officer who participates in this plan, other than a limited amount to make up for any loss of matching contributions under our Section 401(k) plan. We have made this plan available to our executives in order to ensure that our benefits are competitive. See ““Nonqualified Deferred Compensation”Compensation” beginning on page 47.48.

Other Benefits

Our executives participate in Company-sponsored benefit programs available broadly to generally all of our salaried employees, including our employee stock purchase plan and our Section 401(k) plan, which provides a Company matching contribution of 200% of the first 3% of compensation contributed to the plan (utilizing earnings not in excess of an amount established by the Internal Revenue Service ($245,000 in 2010)2011)). Other benefits, such as health and dental plans, group term life insurance, short- and long-term disability insurance and travel accident insurance, are also available generally to all of our salaried employees.

Tax and Accounting Implications

Deductibility of Executive Compensation.

Our Compensation Committee’s policy is to consider the tax treatment of compensation paid to our executive officers while simultaneously seeking to provide our executives with appropriate rewards for their performance. Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), we may not deduct compensation of more than $1 million paid to any “covered employee” unless the compensation is paid pursuant to a plan which is performance-related, nondiscretionary and has been approved by our stockholders. To the extent that such compensation paid to our executive officers is subject to and does not qualify for deduction under Section 162(m), our Compensation Committee is prepared to exceed the limit on deductibility under Section 162(m) to the extent necessary to ensure our executive officers are compensated in a manner consistent with our best interests and those of our stockholders. Because we qualify as a REIT under the Code, we generally distribute at least 100% of our net taxable income each year and therefore do not pay federal income tax. As a result, and based on the level of cash compensation paid to our executive officers, the possible loss of a federal tax deduction would not be expected to have a material impact on us.

Accounting for Stock-Based Compensation.

We account for stock-based awards in accordance with the requirements of ASC Topic 718.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of Boston Properties has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee:

David A. Twardock, Chair

Lawrence S. Bacow

Dr. Jacob A. Frenkel

COMPENSATION OF EXECUTIVE OFFICERS

Summary Compensation Table

The following table sets forth the compensation paid for 2011, 2010 2009 and 20082009 to each of our named executive officers.