<PAGE>

                                                                    EXHIBIT 10.5

                                 NAVISITE, INC.
                           DEFERRED COMPENSATION PLAN

                                   ARTICLE I
                             ESTABLISHMENT OF PLAN


1.1   Purpose.  The NaviSite, Inc. Deferred Compensation Plan is hereby
      -------
established by the Board of Directors of NaviSite, Inc. ("NaviSite"), a
Delaware corporation, to provide deferred compensation benefits to selected
executives of NaviSite and certain related subsidiaries as more fully provided
herein. The benefits provided under the Plan are intended to be in addition to
other employee benefits programs offered by the Participating Employers (as
defined in Section 2.18), including but not limited to tax-qualified employee
benefit plans.

1.2   Prior Plan.  NaviSite has been a Participating Employer in the CMGI
      ----------
and Participating Subsidiaries Deferred Compensation Plan (the "Prior Plan").
In connection with the initial public offering of its common stock, NaviSite has
decided to continue providing such benefits to its employees under a separate
plan.  Therefore, NaviSite hereby adopts this unfunded deferred compensation
plan, to be known as the NaviSite, Inc. Deferred Compensation Plan, hereinafter
referred to as the "Plan" as a continuation of the Prior Plan.  All of
NaviSite's liabilities under the terms of the Prior Plan, with respect to
benefits accrued by its employees as well as new benefits for employees, will
henceforth be provided under the terms of this Plan.

1.3   Applicability of ERISA.  This Plan is intended to be a "top-hat" plan.
      ----------------------
This is an unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees within the meaning of ERISA.

                                  ARTICLE II
                                  DEFINITIONS

  As used within this document, the following words and phrases have the
meanings described in this Article II unless a different meaning is required by
the context. Some of the words and phrases used in the Plan are not defined in
this Article II, but for convenience, are defined as they are introduced into
the text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only, and are not
to be construed so as to alter any of the terms of the Plan.
<PAGE>

2.1   Annual Deferral.  The amount of Base Salary and/or Bonuses which the
      ---------------
Participant elects to defer in each Deferral Period pursuant to Article 4.1 of
the Plan document.

2.2   Basic Salary.  A Participant's base annual salary for the applicable
      ------------
Plan Year.

2.3   Beneficiary.  An individual or entity designated by a Participant in
      -----------
accordance with Section 14.6.

2.4   Board or Board of Directors.  The Board of Directors of NaviSite.
      -----    ------------------

2.5   Bonus.  Earnings awarded to a Participant at the option of the
      -----
Participating Employer which may or may not occur during each Plan Year.

2.6   Code.  The Internal Revenue Code of 1986.  Reference to a section of
      ----
the Code shall include that section and any comparable section or sections of
any future legislation that amends, supplements or supersedes such section.

2.7   Committee.  A committee of one or more individuals appointed by the
      ---------
Board of Directors to administer the Plan, or, in the absence of such
appointment, the Board of Directors.

2.8   Deferral Account.  The account established for a Participant pursuant
      ----------------
to Section 5.1 of the Plan document.

2.9   Deferral Election.  The election made by the Participant pursuant to
      -----------------
Section 4.1 of the Plan document.

2.10  Deferral Period.  The Plan Year, or in the case of a newly hired or
      ---------------
promoted employee who becomes an Eligible Employee during a Plan Year, the
remaining portion of the Plan Year.  In the case of the first Plan Year under
the Prior Plan, the Deferral Period commenced December 1, 1998 and ended
December 31, 1998.

2.11  Disability.  A total and permanent disability, which qualifies the
      ----------
Participant for early payout of benefits, as described in Section 7.2.  The
existence of a Disability shall be determined by the Committee on the advice
of a physician chosen by the Committee.

                                       2
<PAGE>

2.12  Effective Date.  The Prior Plan was effective December 1, 1998.  The terms
      --------------
of this Plan will be effective on the closing of the initial public offering of
NaviSite's common stock.

2.13  Eligible Employee.  Any person who is employed by NaviSite on the
      -----------------
Effective Date of the Plan and who was an Eligible Employee under the Prior
Plan, and any employee of the Participating Employer who is designated by the
Board of Directors.

2.14  ERISA.  The Employee Retirement Income Security Act of 1974, as amended.
      -----

2.15  IRS.  The Internal Revenue Service.
      ---

2.16  Participant.  Any individual who becomes eligible to participate in the
      -----------
Plan pursuant to Article III of the Plan document.

2.17  Participant Agreement and Deferral Election Form.  The written agreement
      ------------------------------------------------
made by Participant to defer his Basic Salary and/or Bonus.  Such written
agreement shall be in a format designated by NaviSite.

2.18  Participating Employer.  NaviSite and each related subsidiary of NaviSite
      ----------------------
which has adopted this Plan with the consent of NaviSite.  For purposes of this
Plan, a "related subsidiary" is a subsidiary that together with NaviSite would
be treated as a single employer within the meaning of Code Section 414(b), (c),
(m) or (o) of the Code.

2.19  Plan.  The NaviSite, Inc. Deferred Compensation Plan.
      ----

2.20  Plan Administrator.  NaviSite, unless NaviSite designates another
      ------------------
individual or entity to hold the position of the Plan Administrator.

2.21  Plan Year.  For the initial Plan Year under the Prior Plan, the period
      ---------
beginning December 1, 1998 and ending on December 31, 1998.  Thereafter, "Plan
Year" means the 12-month period beginning each January 1 and ending on the
following December 31.

2.22  Rabbi Trust.  The Rabbi Trust, which NaviSite may, in its discretion,
      -----------
establish for the Plan, as amended from time to time.

                                       3
<PAGE>

2.23  Specified Age.  Age 65 or later age chosen by the Participant on his
      -------------
Participation Agreement and Deferral Election Form.

2.24  Valuation Date.  Each business day of the Plan Year.
      --------------

2.25  Years of Service.  Each consecutive twelve (12) month period during
      ----------------
which a Participant is continuously employed by the Participating Employer.

                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION

3.1   Participation Eligibility.  Participation in the Plan is open only to
      -------------------------
Eligible Employees of a Participating Employer.  Any Participant in the Prior
Plan who is an employee or former employee of NaviSite on the Effective Date of
the Plan will automatically cease to be a Participant under the Prior Plan and
immediately become a Participant under the Plan.  An Eligible Employee may
become a Participant by submitting a properly executed Participation Agreement
and Deferral Election form prior to January 1 of the Plan Year for which it is
effective.  Any employee becoming an Eligible Employee after January 1 of any
Plan Year (e.g., new hires or promoted employees or newly designated
participating subsidiaries), may become a Participant for the Deferral Period
commencing on or after he becomes an Eligible Employee if he submits a properly
completed Participation Agreement and Deferral Election Form within thirty (30)
days after becoming eligible for participation.

3.2   Subsequent Entry into Plan. An Eligible Employee who does not elect to
      --------------------------
participate at the time of initial eligibility as set forth in Section 3.1 shall
remain eligible to become a Participant in subsequent Plan Years as long as he
continues his status as an Eligible Employee. In such event, the Eligible
Employee may become a Participant by submitting a properly executed
Participation Agreement and Deferral Election Form prior to January 1 of the
Plan Year for which it is effective.

                                  ARTICLE IV
                                CONTRIBUTIONS

4.1   Deferral Election.  Before the first day of each Plan Year, a
      -----------------
Participant may file with the Committee a Participation Agreement and Deferral
Election Form indicating the amount of Basic Salary and/or Bonus deferrals that
Plan Year.  A Participant shall not be obligated to make a Deferral Election in
each Plan Year. After a Plan Year commences, such Deferral Election shall
continue for the entire Plan Year except that it shall terminate upon
termination of employment.  On the Effective Date of the Plan, any Participation
Agreement and Deferral Election Form filed under the Prior Plan for 1999 by an
Eligible Employee of NaviSite shall continue in full force and effect under the
terms of this Plan.

                                       4
<PAGE>

4.2   Maximum Deferral Election.  A Participant may elect to defer up to 25%
      -------------------------
of Basic Salary and/or up to 100% of Bonus earned during the corresponding
Deferral Period.  The amount of deferral must be stated as a percentage.  A
Deferral Election may be automatically reduced if the Committee determines that
such action is necessary to meet Federal or state tax withholding obligations.

4.3   Minimum Deferral Election.  A Participant must either (i) elect to
      -------------------------
defer at least $2,000 during the Deferral Period from Basic Salary, Bonus, or a
combination of Basic Salary and Bonus or (ii) make no deferral during such
Deferral Period.

4.4   Employer Contributions.  Participating Employer may, in its sole
      ----------------------
discretion, make a contribution to the Participants' Deferral Accounts.

                                   ARTICLE V
                                   ACCOUNTS

5.1   Deferral Accounts.  Solely for recordkeeping purposes, the Plan
      -----------------
Administrator shall establish a Deferral Account for each Participant.  A
Participant's Deferral Account shall be credited with the contributions made by
him or on his behalf by the Participating Employer under Section 4.4 and shall
be credited (or charged, as the case may be) with the hypothetical or deemed
investment earnings and losses determined pursuant to Section 5.3, and charged
with distributions made to or with respect to him.  Any deferral account under
the Prior Plan maintained for an employee or former employee of NaviSite shall
be governed solely by the terms of this Plan after its Effective Date.

5.2   Crediting of Deferral Accounts.  Salary contributions under Section
      ------------------------------
4.1 shall be credited to a Participant's Deferral Account as of the date on
which such contributions were withheld from his Basic Salary. Bonus
contributions under Section 4.1 shall be credited to a Participant's Deferral
Account as of the date on which the contribution would have otherwise been paid
in cash. Contributions under Section 4.4 shall be credited to the Participant's
Deferral Account as of the date declared by the Participating Employer. Any
distribution with respect to a Deferral Account shall be charged to such
Deferral Account as of the date the distribution is made by the Participating
Employer or the trustee of any Rabbi Trust established for the Plan.

                                       5
<PAGE>

5.3   Earning Credits or Losses.  Amounts credited to a Deferral Account
      -------------------------
shall be credited with deemed net income gain and loss, including the deemed net
unrealized gain and loss based on hypothetical investment directions made by the
Participant with respect to such Deferral Account on a form designated by
NaviSite, in accordance with investment options and procedures adopted by
NaviSite in its sole discretion, from time to time.  Such earnings will continue
to accrue during any period in which installments are paid pursuant to Article
VII.  Any such form executed with respect to the Prior Plan by an individual who
is an employee or former employee of NaviSite shall continue in effect until
modified in accordance with the terms of this Plan.

5.4   Hypothetical Nature of Accounts.  The Plan constitutes a mere promise
      -------------------------------
by the Participating Employer to make the benefit payments in the future.  Any
Deferral Account established for a Participant under this Article V shall be
hypothetical in nature and shall be maintained for the Participating Employer's
recordkeeping purposes only, so that any contributions can be credited and so
that deemed investment earnings and losses on such amounts can be credited (or
charged, as the case may be).  Neither the Plan nor any of the Deferral Accounts
(or subaccounts) shall hold any actual funds or assets.  The right of any
individual or entity to receive one or more payments under the Plan shall be an
unsecured claim against the general assets of the Participating Employer.  Any
liability of the Participating Employer to any Participant, former Participant
or Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan.  The Participating Employer, the
board of directors of any Participating Employer, the Committee and any
individual or entity shall not be deemed to be a trustee of any amounts to be
paid under the Plan.  Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Participating Employer and a
Participant, former Participant, Beneficiary or any other individual or entity.
NaviSite may, in its sole discretion, establish a Rabbi Trust as a vehicle in
which to place funds with respect to this Plan.

The Participating Employer does not in any way guarantee any Participant's
Deferral Account against loss or depreciation, whether caused by poor investment
performance, insolvency of a deemed investment or by any other event or
occurrence. In no event shall the employees, officers, directors or stockholders
of the Participating Employer be liable to any individual or entity on account
of any claim arising by reason of the Plan provisions or any instrument or
instruments implementing its provisions, or for the failure of any Participant,
Beneficiary or other individual or entity to be entitled to any particular tax
consequences with respect to the Plan or any credit or payment thereunder.

                                       6
<PAGE>

5.5   Statement of Deferral Accounts.  The Plan Administrator shall provide
      ------------------------------
to each Participant quarterly statements setting forth the value of the Deferral
Account maintained for such Participant.

                                  ARTICLE VI
                                    VESTING

6.1   Vesting.  The Participating Employer's contributions credited to a
      -------
Participant's Deferral Account under Section 4.4 and any deemed investment
earnings attributable to these contributions shall be one hundred percent (100%)
vested or nonforfeitable when the Participant has five Years of Service with the
Participating Employer.  Prior to the time a Participant has five Years of
Service with the Participating Employer, the Participating Employer's
contributions to his account shall be zero percent (0%) vested.  In addition, a
Participant shall be one hundred percent (100%) vested in the Participating
Employer's contributions, including any deemed investment earnings attributable
to these contributions, upon his death or Disability while he is actively
employed by the Participating Employer.  All other amounts credited to a
Participant's Deferral Account shall be one hundred percent (100%) vested at all
times.

                                  ARTICLE VII
                                   BENEFITS

7.1   Attainment of Specified Age.  Unless benefits have already commenced
      ---------------------------
pursuant to another section in this Article VII, a Participant shall be entitled
to begin receipt of the vested amount credited to his Deferral Account as of the
Valuation Date coinciding with his Specified Age chosen according to his
Participation Agreement and Deferral Election Form.  Payment of any amount under
this Section shall commence within thirty (30) days of the Participant's
Specified Age and in accordance with the payment method elected by the
Participant on his Participation Agreement and Deferral Election Form.  Payments
shall commence on or after that age even if the Participant is still then
employed.

7.2   Disability.  If a Participant suffers a Disability while employed with
      ----------
the Participating Employer and before he is entitled to benefits under this
Article, he shall receive the amount credited to his Deferral Account as of the
Valuation Date coinciding with the Date on which the Participant is determined
to have suffered a

                                       7
<PAGE>

Disability. Payment of any amount under this section shall commence within
thirty (30) days of when the Committee determines the existence of the
Participant's Disability and in accordance with the payment method elected by
the Participant on his Participation Agreement and Deferral Election Form.

7.3   Pre-Retirement Survivor Benefit.  If a Participant dies before
      -------------------------------
becoming entitled to benefits under this Article, the Beneficiary or
Beneficiaries designated under Section 14.6 shall receive in a single lump sum a
Pre-Retirement Survivor Benefit equal to two (2) times the Participant's Basic
Salary for the Plan Year in which he dies (such Pre-Retirement Survivor Benefit
not to exceed $500,000) in addition to the vested amount credited to the
Participant's Deferral Account as of the Valuation Date coinciding with the date
of the Participant's death.  Payment of any amount under this section shall be
made within thirty (30) days of the Participant's death, or if later, within
thirty (30) days of when the Committee received notification of or otherwise
confirms the Participant's death.

7.4   Post-Retirement Survivor Benefit.  If a Participant dies after
      --------------------------------
benefits have commenced, but prior to receiving complete payment of benefits
under this Article, the Beneficiary or Beneficiaries designated under Section
14.6, shall receive in a single lump sum the vested amount credited to the
Participant's Deferral Account as of the Valuation Date coinciding with the date
of the Participant's death.  Payment of any amount under this section shall be
made within thirty (30) days of the Participant's death, or if later, within
thirty (30) days of when the Committee received notification of or otherwise
confirms the Participant's death.

7.5   Termination.  If a Participant's employment terminates with the
      -----------
Participating Employer before he becomes entitled to receive benefits by reason
of any of the above Sections, he shall receive in a single lump sum the vested
amount credited to his Deferral Account as of the Valuation Date coinciding with
the date on which the Participant's employment terminates.  Payment of any
amount under this Section shall be made within thirty (30) days of when the
Participant terminates his employment with the Participating Employer.

7.6   Change in Control.  If a Change in Control occurs before a Participant
      -----------------
becomes entitled to receive benefits by reason of any of the above sections or
before the Participant has received complete payment of his benefits under this
Article, he shall receive a lump sum payment of the amount credited to his
Deferral Account as of the Valuation Date immediately preceding the date on
which the Change in Control occurs.  Payment of any amount under this section
shall be made within thirty (30) days of when the Change in Control occurs.

                                       8
<PAGE>

For purposes of this Plan, a Change in Control shall mean a change in control of
the Participating Employer of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Participating Employer is in fact required to comply therewith; provided
that, without limitation, a Change in Control for purposes of this Plan shall be
deemed to have occurred if on any future date:

     (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Participating Employer, any trustee or other
fiduciary holding securities under an employee benefit plan of the Participating
Employer or a corporation owned, directly or indirectly, by the stockholders of
the Participating Employer in substantially the same proportions as their
ownership of stock of the Participating Employer for the first time becomes the
"beneficial owner" (as defined in the Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Participating Employer representing
thirty percent (30%) or more of the combined voting power of the Participating
Employer's then outstanding securities; or

     (ii) during any period of twenty-four (24) consecutive months (not
including any period prior to the Effective Date of this Plan), individuals who
at the beginning of such period constitute the Participating Employer's board of
directors and any new director (other than a director designated by a person who
has entered into an agreement with the Participating Employer to effect a
transaction described in paragraphs (i), (ii) or (iii) of this Section) whose
election by the board of directors of the Participating Employer or nomination
for election by the stockholders of the Participating Employer was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

     (iii) the stockholders of the Participating Employer approve a merger
or consolidation of the Participating Employer with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of the Participating Employer outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the combined
voting securities of the Participating Employer or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Participating
Employer (or similar transaction) in which no "person" (as hereinabove defined)
acquires thirty percent (30%) or more of the combined voting power of the
Participating Employer's then outstanding securities; or

                                       9
<PAGE>

     (iv)  the stockholders of the Participating Employer approve a plan of
complete liquidation of the Participating Employer or an agreement for the sale
or disposition by the Participating Employer of all or substantially all of the
Participat  ing Employer's assets.

7.7   Payment Methods.  Unless otherwise provided in this Article VII, a
      ---------------
Participant may elect to receive payment of the vested amount credited to his
Deferral Account in a single lump sum or in five (5) or (10) annual
installments.  This election must be made on the Participation Agreement and
Deferral Election Form for the corresponding Plan Year.  Any installment
payments shall be paid annually on the first practicable day after the
distributions are scheduled to commence.  Each installment payment shall be
determined by multiplying the Deferral Account balance by a fraction, the
numerator of which is one and the denominator of which is the number of
remaining installment payments.

                                 ARTICLE VIII
                           IN-SERVICE DISTRIBUTIONS

8.1   Election of In-Service Distributions.  A Participant may elect in each
      ------------------------------------
Deferral Period, for that particular Deferral Election, to receive in the future
an In-Service Distribution from his Deferral Account.  Such Deferral Election
shall state the percentage or flat dollar amount and date on which such In-
Service Distribution is to be paid, provided that such date is not earlier than
five (5) years from January 1st of the Plan Year following the year of said
election.  For example:  The earliest distribution date for the initial Plan
Year ending December 31, 1999 would be January 1, 2005.  This is calculated
using January 1, 2000 as the "January 1/st/ of the Plan Year following" plus
five (5).

8.2   Payment of In-Service Distributions.  All In-Service Distributions
      -----------------------------------
shall be made within thirty (30) days of the date stated on the Election Form.
Distributions shall be in the form of a single lump sum payment.

8.3   Termination Prior to In-Service Distribution Date.  Notwithstanding a
      -------------------------------------------------
Participant's election of an In-Service Distribution, in the event a
Participant's employment terminates for any reason pursuant to Section 7.5 of
the Plan document and prior to such Participant receiving any In-Service
Distribution, the Participant shall receive his Deferral Account according to
the payment method designated in Article VII or as elected on his Participation
Agreement and Deferral Election Form.

                                      10

<PAGE>

                                  ARTICLE IX
                             HARDSHIP WITHDRAWALS

9.1   Hardship Withdrawals.  If a Participant incurs an unforeseeable
      --------------------
emergency, the Participant may make a written request to the Committee for a
hardship withdrawal ("Hardship Withdrawal") from his account.  An
unforeseeable emergency is a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
the Participant's dependent (as defined in Section 152(e) of the Code), loss of
the Participant's property due to casualty or other similar extraordinary and
unforeseen circumstances beyond the control of the Participant.  Withdrawals of
amounts because of unforeseeable emergencies are only permitted to the extent
reasonably necessary to satisfy the emergency needed.  This section shall be
interpreted in a manner consistent with Sections 1.457-2(h)(4) and 1.457-2(h)(5)
of the Treasury Regulations.  In the event of a Hardship Withdrawal, the
Participant's deferrals for the remainder of the Plan Year shall be suspended.
Deferrals may commence with the next following Plan Year provided the
Participant completes the appropriate Participation Agreement and Deferral
Election form prior to January 1 of the corresponding Plan Year.

                                   ARTICLE X
                            ESTABLISHMENT OF TRUST

10.1  Establishment of Trust.  NaviSite may establish a Rabbi Trust for the
      ----------------------
Plan. If established, all benefits payable under this Plan to a Participant
shall be paid directly by the Participating Employer from the Rabbi Trust. To
the extent that such benefits are not paid from the Rabbi Trust, the benefits
shall be paid from the general assets of the Participating Employer. The assets
of the Rabbi Trust are subject to the claims of the Participating Employer's
creditors in the event of its insolvency. Except as to any amounts paid or
payable to a Rabbi Trust, the Participating Employer shall not be obligated to
set aside, earmark or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and/or his designated
Beneficiaries shall not have any property interest in any specific assets of the
Participating Employer other than the unsecured right to receive payments from
the Participating Employer, as provided in this Plan.

                                      11
<PAGE>

                                  ARTICLE XI
                              PLAN ADMINISTRATION

11.1  Plan Administration.  The Plan shall be administered by the Committee and
      -------------------
such Committee may designate an agent to perform the recordkeeping duties.  The
Committee shall construe and interpret the Plan, including disputed and doubtful
terms and provisions and, in its sole discretion, decide all questions of
eligibility and determine the amount, manner and time of payment of benefits
under the Plan.  The determinations and interpretations of the Committee shall
be consistently and uniformly applied to all Participants and Beneficiaries,
including but not limited to interpretations and determinations of amounts due
under this Plan, and shall be final and binding on all parties.  The Plan at all
times shall be interpreted and administered as an unfunded deferred compensation
plan, and no provision of the Plan shall be interpreted so as to give any
Participant or Beneficiary any right in any asset of the Participating Employer
which is a right greater than the right of a general unsecured creditor of the
Participating Employer.

                                  ARTICLE XII
                          NON-ALIENATION OF BENEFITS

12.1  Non-alienation of Benefits.  The interests of Participants and their
      --------------------------
Beneficiaries under this Plan are not subject to the claims of their creditors
and may not be voluntarily or involuntarily sold, transferred, alienated,
assigned, pledged, anticipated, or encumbered, attached or garnished.  Any
attempt by a Participant, his Beneficiary, or any other individual or entity to
sell, transfer, alienate, assign, pledge, anticipate, encumber, attach, garnish,
charge or otherwise dispose of any right to benefits payable shall be void.  The
Participating Employer may cancel and refuse to pay any portion of a benefit
which is sold, transferred, alienated, assigned, pledged, anticipated,
encumbered, attached or garnished.  The benefits which a Participant may accrue
under this Plan are not subject to the terms of any Qualified Domestic Relations
Order (as that term is defined in Section 414(p) of the Code) with respect to
any Participant, and the Plan Administrator, board of directors of any
Participating Employer, Committee and Participating Employer shall not be
required to comply with the terms of such order in connection with this Plan.
The withholding of taxes from Plan payments, the recovery of Plan overpayments
of benefits made to a Participant or Beneficiary, the transfer of Plan benefit
rights from the Plan to another plan, or the direct deposit of Plan Payments to
an account in a financial institution (if no actually a part of an arrangement
constituting an assignment or alienation) shall not be construed as assignment
or alienation under this Article XII.

                                      12
<PAGE>

                                 ARTICLE XIII
                           AMENDMENT AND TERMINATION

13.1  Amendment and Termination.  NaviSite reserves the right to amend, alter or
      -------------------------
discontinue this Plan at any time.  Such action may be taken in writing by any
officer of NaviSite who has been duly authorized by NaviSite to perform acts of
such kind. However, no such amendment shall deprive any Participant or
Beneficiary of any portion of any benefit which would have been payable had the
Participant's employment with NaviSite terminated on the effective date of
such amendment or termination.  Notwithstanding the provisions of this Article
XIII to the contrary, NaviSite may amend the Plan at any time, in any manner, if
NaviSite determines any such amendment is required to ensure that the Plan is
characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA Sections
201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law including, but not limited to, ERISA and the
Code.

                                  ARTICLE XIV
                              GENERAL PROVISIONS

14.1  Good Faith Payment.  Any payment made in good faith in accordance with
      ------------------
provisions of the Plan shall be a complete discharge of any liability for the
making of such payment under the provisions of this Plan.

14.2  No Right to Employment.  This Plan does not constitute a contract of
      ----------------------
employment, and participation in the Plan shall not give any Participant the
right to be retained in the employment of the Participating Employer.

14.3  Binding Effect.  The provisions of this Plan shall be binding upon the
      --------------
Participating Employer and its successors and assigns and upon every Participant
and his heirs, Beneficiaries, estates and legal representatives.

14.4  Participant Change of Address.  Each Participant entitled to benefits
      -----------------------------
shall file with the Plan Administrator, in writing, any change of post office
address. Any check representing payment and any communication addressed to a
Participant or a former Participant at this last address filed with the Plan
Administrator, or if no such address has been filed, then at his last address as
indicated on the Participating Employer's records, shall be binding on such
Participant for all purposes of the Plan, and neither the Plan Administrator,
the Participating Employer nor any other payor shall be obligated to search for
or ascertain the location of any such Participant. If

                                      13
<PAGE>

the Plan Administrator is in doubt as to the address of any Participant entitled
to benefits or as to whether benefit payments are being received by a
Participant, it shall, by registered mail addressed to such Participant at his
last known address, notify such Participant that:

     (i) All unmailed and future Plan payments shall be withheld until
Participant provides the Plan Administrator with evidence of such Participant's
continued life and proper mailing address; and

     (ii) Participant's right to any Plan payment shall, at the option of the
Committee, be canceled forever, if, at the expiration of five (5) years from the
date of such mailing, such Participant or his Beneficiary shall not have
provided the Committee with evidence of his continued life and proper mailing
address.

14.5  Notices.  Each Participant shall furnish to the Plan Administrator any
      -------
information the Plan Administrator deems necessary for purposes of administering
the Plan, and the payment provisions of the Plan are conditional upon the
Participant furnishing promptly such true and complete information as the Plan
Administrator may request.  Each Participant shall submit proof of his age when
required by the Plan Administrator.  The Plan Administrator shall, if such proof
of age is not submitted as required, use such information as is deemed by it to
be reliable, regard  less of the lack of proof, or the misstatement of the age
of individuals entitled to benefits.  Any notice or information which, according
to the terms of the Plan or requirements of the Plan Administrator, must be
filed with the Plan Administrator, shall be deemed so filed if addressed and
either delivered in person or mailed to and received by the Plan Administrator,
in care of NaviSite at:

                         NaviSite, Inc.
                         100 Brickstone Square
                         Andover, MA  01810

14.6  Designation of Beneficiary.  Each Participant shall designate, by name, on
      --------------------------
Beneficiary designation forms provided by the Plan Administrator, the
Beneficiary(ies) who shall receive any benefits which might be payable after
such Participant's death. A Beneficiary designation may be changed or revoked
without such Beneficiary's consent at any time or from time to time in the
manner as provided by the Plan Administrator, and the Plan Administrator shall
have no duty to notify any individual or entity designated as a Beneficiary of
any change in such designation which might affect such individual or entity's
present or future rights. If the designated Beneficiary does not survive the
Participant, all amounts which would have

                                      14
<PAGE>

been paid to such deceased Beneficiary shall be paid to any remaining
Beneficiary in that class of beneficiaries, unless the Participant has
designated that such amounts go to the lineal descendants of the deceased
Beneficiary. If none of the designated primary Beneficiaries survive the
Participant, and the Participant did not designate that payments would be
payable to such Beneficiary's lineal descendants, amounts otherwise payable to
such Beneficiaries shall be paid to any successor Beneficiaries designated by
the Participant, or if none, to the Participant's spouse, or, if the Participant
was not married at the time of death, the Participant's estate.

No Participant shall designate more than five (5) simultaneous Beneficiaries,
and if more than one (1) Beneficiary is named, Participant shall designate the
share to be received by each Beneficiary.  Despite the limitation on five (5)
Beneficiaries, a Participant may designate more than five (5) Beneficiaries
provided such beneficiaries are the surviving spouse and children of the
Participant.  If a Participant designates alternative, successor, or
contingent Beneficiaries, such Participant shall specify the shares, terms and
conditions upon which amount shall be paid to such multiple, alternative,
successor or contingent beneficiaries.  Any payment made under this Plan after
the death of a Participant shall be made only to the Beneficiary or
Beneficiaries designated pursuant to this Section.  Any beneficiary designation
made in accordance with the Prior Plan shall be treated as if made under this
Plan.

14.7  Claims.  Any claim for benefits must initially be submitted in writing to
      ------
the Plan Administrator.  If such claim is denied (in whole or in part), the
claimant shall receive notice from the Plan Administrator, in writing, setting
forth the specific reasons for denial, with specific reference to applicable
provisions of this Plan.  Such notice shall be provided within ninety (90) days
of the date the claim for benefits is received by the Plan Administrator, unless
special circumstances require an extension of time for processing the claim,
in which event notification of the extension shall be provided to the claimant
prior to the expiration of the initial 90 day period. The extension notification
shall indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render its decision.  Any such
extension shall not exceed 90 days.  Any disagreements about such
interpretations and construction may be appealed in writing by the claimant
within sixty (60) days to the Plan Administrator.  The Plan Administrator shall
respond to such appeal within sixty (60) days, with a notice in writing fully
disclosing its decision and its reasons, unless special circumstances require
an extension of time for reviewing the claim, in which event notification of the
extension shall be provided to the claimant prior to the expiration of the
initial sixty (60) day period. Any such extension shall be provided to the
claimant prior to the commencement of the extension.  Any such extension shall
not exceed 60 days.  No employee of NaviSite or member of the Board of
Directors, or any committee thereof, shall be liable to any individual or entity
for any action taken hereunder, except those actions which are unreasonable and
undertaken with lack of good faith.

                                      15
<PAGE>

14.8  Action by Board of Directors.  Any action required to be taken by the
      ----------------------------
board of directors of the Participating Employer pursuant to the Plan provisions
may be performed by a committee of the board, to which the board of directors of
the Participating Employer delegates the authority to take actions of that kind.

14.9  Governing Law.  To the extent not superseded by the laws of the United
      -------------
States, the laws of the Commonwealth of Massachusetts shall be controlling in
all matters relating to this Plan.

14.10 Severability.  In the event any provision of this Plan shall be held
      ------------
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be interpreted
and enforced as if such illegal and invalid provisions had never been set forth.

IT WITNESS WHEREOF, NaviSite, Inc. has adopted the foregoing instrument.


                                            NAVISITE, INC.


                                            By /s/ Joel Rosen
                                              ----------------------------
                                            Name:  Joel Rosen
                                            Title: CEO

                                            ATTEST CE Newton
                                                   -----------------------


                                      16