SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrantx

Filed by a Party other than the Registrant¨

Check the appropriate box:

PC CONNECTION, 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):

PC CONNECTION, INC.

730 Milford Road

Merrimack, New Hampshire 03054

(603) 423-2000683-2000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held June 3, 20038, 2004

The 20032004 Annual Meeting of Stockholders of PC Connection, Inc., a Delaware corporation (the “Company”), will be held at the Crowne Plaza Hotel, 2 Somerset Parkway (Exit 8 off the Everett Turnpike),Nashua Marriott, 2200 Southwood Drive, Nashua, New Hampshire on Tuesday, June 3, 20038, 2004 at 10:00 a.m., localEastern time, to consider and act upon the following matters:

Stockholders of record at the close of business on April 21, 200326, 2004 are entitled to notice of and to vote at the meeting and ator any adjournments thereof. The stock transfer books of the Company will remain open. All stockholders are cordially invited to attend the meeting.

By Order of the Board of Directors,

Steven Markiewicz,Secretary

Merrimack, New Hampshire

April 30, 200329, 2004

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ASSUREENSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY IS MAILED IN THE UNITED STATES.

PC CONNECTION, INC.

730 Milford Road

Merrimack, New Hampshire 03054

PROXY STATEMENT FOR THE 20032004 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 3, 20038, 2004

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of PC Connection, Inc., a Delaware corporation (the “Company”), for the 20032004 Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held on Tuesday, June 3, 20038, 2004 at 10:00 a.m., localEastern time, at the Crowne Plaza Hotel, 2 Somerset ParkwayNashua Marriott, 2200 Southwood Drive (Exit 8 off the Everett Turnpike), Nashua, New Hampshire (the “Annual Meeting”) and ator any adjournments of the Annual Meeting. All proxies will be voted in accordance with the stockholders’ instructions. If no choice is specified, the proxies will be voted in favor of the matters set forth in the accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at any time before its exercise by delivery of a written revocation or a subsequently dated proxy to the Secretary of the Company or by voting in person at the Annual Meeting.

The Notice of Meeting, this Proxy Statement, the enclosed proxy, the Company’s Annual Report on Form 10-K for the year ended December 31, 2002,2003, as filed with the Securities and Exchange Commission (the “SEC”), and the Company’s Annual Report to Stockholders for the year ended December 31, 20022003 are being mailed to stockholders on or about May 9, 2003.11, 2004.

Voting Securities and Votes Required

On April 21, 2003,26, 2004, the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting, there were outstanding and entitled to vote an aggregate of 24,659,99725,007,577 shares of Common Stock of the Company, $.01 par value per share (the “Common Stock”). Stockholders are entitled to one vote per share. The stock record books of the Company will remain open for inspection by stockholders of record for ten days prior to the Annual Meeting at the offices of the Company at the above address and at the time and place of the Annual Meeting.

The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual Meeting shall be necessary to constitute a quorum for the transaction of business. Abstentions and broker non-votes will be considered as present for purposes of determining whether a quorum is present.

The affirmative vote of the holders of a plurality of the votes cast by the stockholders entitled to vote at the Annual Meeting is required for the election of directors. The affirmative vote of the holders of a majority of the shares of Common Stock present or represented by proxy and voting at the Annual Meeting is required for the approval of the amendment to the Company’s 1997 Employee Stock Purchase Plan, as amended (the “ESPP”),ratification and the ratificationapproval of the selection of Deloitte & Touche LLP as the Company’s independent auditors.auditors for the current year.

Shares that abstain from voting in a particular matter, and shares held in “street name” by brokers of nominees who indicate on their proxies that they do not have discretionary authority to vote such shares as to a particular matter, will not be counted as votes in favor of such matter and will also not be counted as votes cast or shares voting on such matter. Abstentions and “broker non-votes” will have no effect on the voting on matters, such as the ones presented for stockholder approval at this Annual Meeting, that require the affirmative vote of a certain percentage of the shares voting on the matter.

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, information, as of January 31, 2003, regarding2004, the beneficial ownership of the Company’s Common Stock by: (i) persons known by the Company to own more than 5% of the outstanding shares of Common Stock; (ii) each of the directors of the Company; (iii) each of the current or former executive officers of the Company named in the Summary Compensation Table under the heading “Executive Compensation” below; and (iv) all current directors and executive officers of the Company as a group.

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ELECTION OF DIRECTORS

Directors are to be elected at the Annual Meeting. The Board of Directors is currently fixed at six members. The Company’s Bylaws provide that the directors of the Company will be elected at each annual meeting of the Company’s stockholders to serve until the next annual meeting of stockholders or until their successors are duly elected and qualified.

The persons named in the enclosed proxy (Patricia Gallup and David Hall) will vote to elect the six nominees named below as directors of the Company unless authority to vote for the election of any or all of the nominees is withheld by marking the proxy to that effect. Each nominee is presently serving as a director and each nominee has consented to being named in this Proxy Statement and to serve if elected. If for any reason any nominee should be unable to serve, the person acting under the proxy may vote the proxy for the election of a substitute nominee designated by the Board of Directors. It is not presently expected that any of the nominees will be unavailable to serve, if elected.

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The Board of Directors recommends a vote “FOR” the election of the nominees described below.

Set forth below are the name, age, and length of service as a director for each nominee of the Board of Directors and the positions and offices held by him or her, his or her principal occupation and business experience duringfor at least the past five years and the names of other publicly-held companies of which he or she serves as a director. Information with respect to the number of shares of Common Stock beneficially owned by each director or nominee, directly or indirectly, as of January 31, 2003,2004, appears under “Security Ownership of Certain Beneficial Owners and Management.”

Nominees for Election to the Board of Directors

Patricia Gallup, age 49,50, is a co-founderChairman, President, and CEO of the Company andCompany. She has served on the Company’s Board of Directors since its inception. Sheinception, and has been Chairman since 1998. Ms. Gallup is a co-founder of the Board since January 1998; prior to that time, she fulfilled various Board roles, periodically serving as Chairman. Ms. GallupCompany and has served as an executive officer of the Company since 1982. She was Chief Executive Officer from 1990 to 2001, and reassumedfrom September 2002 to the position in September 2002.present. She also assumedhas held the title of President of the Company as ofsince March 21, 2003.

David Hall, age 54,55, is a co-founder of the Company and has served on the Company’s Board of Directors since its inception. He has been Vice Chairman of the Board since November 1997; prior to that time, he fulfilled various Board roles, periodically serving as Chairman.1998. Mr. Hall was an executive officer of the Company from 1982 through 1997.1997, and since then has served as a project manager and advisor to the Company.

Bruce Barone, age 54,55, has served on the Company’s Board of Directors since June 2002. Mr. Barone has worked as an independent consultant since December 1998. From December 1995 to December 1998, heMr. Barone was

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President and Chief Executive Officer of Overseas Partners Ltd. and Subsidiaries, a reinsurance and real-estate investment company. He also served on that company’s Board of Directors. From September 1977 through December 1995, Mr. Barone was employed by United Parcel Service (UPS) in a variety of positions including Vice President of Finance and Vice President of Financial Planning. He also served as a member of both the UPS Finance and UPS Marketing committees. From December 1998 through the present, he has worked as an independent management consultant.

Joseph Baute, age 75,76, has served on the Company’s Board of Directors since June 2001. From 1979 to 1993, Mr. Baute served as Chairman and Chief Executive Officer of Markem Corporation, an industrial marking and coding systemssolutions provider. Since 1993, Mr. Baute has worked as an independent consultant. Mr. Baute has served on a number of Boards including Houghton-Mifflin Company and the Federal Reserve Bank of Boston, where he was Chairman, and is currently on the Board of Directors of State Street Bank Europe.Europe and the Dead River Company.

Peter Baxter, age 51,52, has served on the Company’s Board of Directors since September 1997. Mr. Baxter was the Vice-Chairman and Chief Operating Officer of People’s Heritage Financial Group, a bank holding company, from April 1998 to March 1999. Mr. Baxter also served as President, Chief Executive Officer, and a director of CFX Corporation, a bank holdingbank-holding company, from January 1989 to April 1998. Mr. Baxter retired in March 1999.

David Beffa-Negrini,age 49,50, has served on the Company’s Board of Directors since September 1994 and as Vice President of Corporate Communications since June 2000. From January 1998 to June 2000, Mr. Beffa-Negrini served as Vice President of Media Development and from January 1992 to January 1998, he served as Director of Merchandising. Prior to this role, Mr. Beffa-Negrini served the Company in a variety of senior management capacities in the areas of merchandising, marketing, and communications. He has been employed by the Company since 1983.

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Board Meetings and Committee MeetingsAttendance

The Board met eleven times during 2003, either in person or by teleconference. During 2003, each director attended at least 75% of the aggregate of the number of Board meetings and the number of meetings held by all committees on which he or she then served. The Board of Directors does not currently have a policy with regard to the attendance of board members at its annual meeting of stockholders. All of the directors, except Mr. Hall, attended the Company’s 2003 Annual Meeting of Stockholders.

Board Committees

The Board of Directors has anestablished two standing committees – Audit and Compensation. The Audit Committee which assistsoperates under a charter that has been approved by the Board in fulfilling its responsibilities to stockholders concerning the Company’s financial reporting and internal controls, and facilitates open communication amongBoard. A copy of the Audit Committee Boardcharter, as in effect on the date of Directors, outside auditors and management. this proxy statement, is attached as Appendix A.

Audit Committee

The Audit Committee discussesCommittee’s responsibilities include:

The Board of Directors has determined that all of its Audit Committee members would qualify as an “audit committee financial expert” as defined in Item 401(h) of Regulation S-K.

The members of the Audit Committee are Messrs. Baute, Barone, and Baxter. The Audit Committee recommends to the Board each fiscal year the independent auditors who will audit the financial statementsis comprised solely of the Company for that year. The independent auditors meet“independent directors” in accordance with the Audit Committee (both with and without the presence of the Company’s management) to review and discuss various matters pertaining to the audit, including the Company’s financial statements, the report of the independent auditors on the results, scope and terms of their work, and their recommendations concerning the financial practices, controls, procedures and policies employed by the Company. The Audit Committee consists of Messrs. Baute, Baxter, and Barone, each of whom are “independent” as defined under Rule 4200(a)(15) of theNasdaq National Association of Securities Dealers’ listingMarket standards. The Audit Committee met six times during 2002.2003.

Compensation Committee

The Company also has a standing Compensation Committee of the Board of Directors that administers the Company’s stock incentive plan and determines the Chairman’ssalary and incentive compensation of the Chief Executive Officer’s salaries and incentive compensation and determines the compensation of other executive officers.Officer.

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During 2002,2003, the Compensation Committee held eleventhree meetings. The members of the Compensation Committee for the year ended December 20022003 are Messrs. Barone, Baute, and Baxter. See “Report of the Compensation Committee.”

Controlled Company Status

The Company does not haveis a nominating committee or a committee serving a similar function. Nominations are made by and through the full“Controlled Company” as defined in Nasdaq Stock Market Rule 4350(c)(3). The Board of Directors.Directors has based this determination on the fact that approximately 69% of the voting stock of the Company is beneficially owned or controlled by Ms. Gallup and Mr. Hall.

The Board of Directors held eleven meetings during fiscal 2002. Each director attended at least 75%does not have a standing Nominating Committee or committee performing similar functions; however, the Board of Directors functions in the capacity of the meetingsNominating Committee. The Board of Directors has determined that three of the six directors currently meet the independence standards under the applicable Nasdaq Stock Market rules. These directors are Messrs. Barone, Baute, and Baxter.

Director Candidates

All of the Company’s current members of the Board of Directors have served as directors since 1997, except Mr. Barone, who became a director in June 2002, and Mr. Baute, who became a director in June 2001. Where called for, qualifications for consideration as a board nominee may vary according to the particular areas of expertise being sought as a complement to the existing board composition. Minimum qualifications include high level leadership experience in business activities, breadth of knowledge about issues affecting the Company, experience on other board of directors, preferably public company boards, and time available for meetings, and consultation on Company matters. The Board of Directors desires a diverse group of candidates who possess the background, skills, and expertise to make a significant contribution to the Board, the Company, and its stockholders. In the event of a need for a new or additional director, the Board of Directors would evaluate potential nominees by reviewing their qualifications, results of personal and reference interviews, and such other information as they may deem relevant.

The Company does not currently employ an executive search firm, or pay a fee to any other third party, to locate qualified candidates for director positions.

Since 2002, the Board of Directors has nominated the current directors for re-election at each annual meeting of stockholders. The Board has not established special procedures for security holders to submit director recommendations. If the Company were to receive recommendations of candidates from the Company’s security holders, the Board of Directors would consider such recommendations in the same manner as all committeesother candidates.

Communicating with the Independent Directors

The Board of Directors has not implemented a process for stockholders of the Board on which he or she served.Company to send communications to the Board.

4Code of Ethics

The Company has adopted a written Code of Ethics that applies to the Company’s directors, officers, and employees, including its principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions. The Code of Ethics was filed as an exhibit to the Company’s Form 10-K for its fiscal year ended December 31, 2003. In addition, the Company intends to post on its Web site all disclosures that are required by law or Nasdaq stock market listing standards concerning any amendments to, or waivers from, any provision of the code.

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Directors’ Compensation

Messrs. Beffa-Negrini, Baxter, Baute, Barone, and Hall each receivereceived a $1,250 monthly retainer and fees of $1,000 for each Board and committee meeting attended, unless the committee meeting was attended on a day of the Board meeting, in which case they received $500 for each committee meeting attended. Effective January 1, 2004, each Director receives a $1,833 monthly retainer and fees of $1,500 for each Board and committee meeting attended unless the committee meeting is attended on a day of the Board meeting, in which case they receive $500$1,000 for each committee meeting attended. In addition, the Board members receive reimbursement for all reasonable expenses incurred in attending Board and committee meetings.

Messrs. Beffa-Negrini, Baxter, Baute, and Barone are also eligible to participate in the Company’s 1997 Stock Incentive Plan.

The following table describes the cash payments made and options granted under the 1997 Stock Incentive Plan to Directors during 2002.2003.

Ms. Gallup does not receive compensation for her services as a member of the Company’s Board of Directors.

Certain Transactions

The Company currently has leases for a facility in Marlow, New Hampshire and two facilities in Keene, New Hampshire with Gallup & Hall (“G&H”), a partnership owned solely by Patricia Gallup and David Hall, the Company’s principal stockholders. The lease for one of the Keene, New Hampshire facilities expires in July 2008 and requires annual rental payments of $141,276 (subject to annual adjustment for changes in the consumer price index). The lease for the Marlow, New Hampshire facility expires in May 2007 and requires annual rental payments of $6,000. The second facility in Keene, New Hampshire was leased on a month-to-month basis requiring monthly rental payments of $1,344. These leases also obligate the Company to pay certain real estate taxes and insurance premiums on the premises. Rent expense under all such leases aggregated $173,109$163,401 for the year ended December 31, 2002.2003.

In November 1997, the Company entered into a fifteen-year lease for a new 114,000 square foot corporate headquarters in Merrimack, New Hampshire with G&H Post, L.L.C., an entity owned solely by Patricia Gallup and David Hall. The Company began occupying the new facility upon completion of construction in late November 1998, and lease payments began in December 1998. Annual lease payments under the terms of the lease are $911,400 for the first five years of the lease, increasing to $1,025,350 for years six through ten and to $1,139,400 for years 11 through 15. The lease is in its sixth year. The lease requires the Company to pay its proportionate share of real estate taxes and common area maintenance charges as additional rent and also to pay insurance premiums for the leased property. The Company has the option to renew the lease for two additional terms of five years.

During 20022003 the Company provided various facilities management, maintenance, financial, tax, and legal services to certain affiliates in connection with the operation of facilities leased by the Company from those affiliates. The Company was reimbursed $65,327 by G&H Post, L.L.C. and $66,409$64,207 by G&H during 20022003 for those services.

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The 1998 PC Connection Voting Trust

In connection with the Company’s initial public offering in March 1998, Patricia Gallup and David Hall placed substantially all of the shares of Common Stock that they beneficially owned immediately prior to the public offering into a Voting Trust (the “Voting Trust”) of which they serve as co-trustees. The Voting Trust is the record holder of 16,338,188 shares of Common Stock as of the record date, April 26, 2004. The terms of the Voting Trust require that both Ms. Gallup and Mr. Hall, as co-trustees, must agree as to the manner of voting the shares of Common Stock of the Company held by the Voting Trust in order for the shares to be voted. In the event the co-trustees are deadlocked with respect to the election of directors at a meeting of stockholders, the Board of Directors may require the co-trustees to execute and deliver to the Secretary of the Company a proxy representing all shares issued and outstanding in the name of the Voting Trust and entitled to vote in the election of directors. Such proxy shall confer upon the proxyholder authority to attend the meeting for purposes of establishing a quorum and to vote for the directors nominated by the Board of Directors, provided that such nominees are incumbent directors elected with the consent of the co-trustees. Each of Ms. Gallup and Mr. Hall may transfer shares of Common Stock for value to unaffiliated third parties. Any shares so transferred will no longer be subject to the Voting Trust and an equal number of the non-transferring co-trustee’s shares will be released from the Voting Trust. Transfers by either of Ms. Gallup or Mr. Hall in excess of 75,000 shares in any 90-day period, or that would decrease the shares held by the Voting Trust to less than a majority of the outstanding shares, will be subject to a right of first refusal to the other. The Voting Trust will terminate when it holds less than 10% of the outstanding shares of Common Stock of the Company or at the death of both co-trustees. In addition, in the event of the death or incapacity of either co-trustee, or when either of Ms. Gallup or Mr. Hall holds less than 25% of the beneficial interest held by the other in the Voting Trust, the other will become the sole trustee of the Voting Trust with the right to vote all the shares held by the Voting Trust.

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Executive Compensation

Summary Compensation Table.The following table sets forth certain compensation information for the years ended December 31, 2003, 2002, 2001, and 20002001 for all persons who served as Chief Executive Officer of the Company or in a similar capacity during 20022003 and the fourthree other most highly compensated executive officers of the Company who were serving as executive officers on December 31, 2002 and one other executive officer of the Company who ceased serving as an executive officer during 20022003 (collectively, the “Named Executive Officers”), as required under applicable rules of the SEC.

Summary Compensation Table

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Employment and Severance Agreements

The Company is a party to employment agreements with certain of the Named Executive Officers.Ms. Gallup and Messrs. Wilkins, Gavin, and Mousseau. Each employment agreement contains provisions for establishing the annual base salary and bonus for each such executive officer. Pursuant to the terms of the employment agreements, the 20032004 annual base salary for each of Ms. Gallup and Messrs. Koppel andMr. Wilkins are $430,000 $425,000, and $375,000, respectively. In addition, the Named Executive Officers are eligible to receive an annual bonus based upon the achievement of individual and Company goals. The employment agreements may be terminated by the Named Executive Officer or by the Company. Under the terms of Messrs. Koppel’s andMr. Wilkins’ employment agreements,agreement, if the Company terminates such executive’s employment without cause (as defined therein), the Company is required to pay to such executive severance payments at the executive’s then applicable base salary rate for a period of twelve months. Mr. Koppel’s employment agreement included certain non-compete obligations which extend for three years after termination of employment. Mr. Wilkins’ employment agreement includes certain non-compete obligations which extend for two years after termination of employment.

The Company has entered into letter agreements with Messrs. Gavin and Mousseau, providing for severance payments for six months of their respective annual base salary if the Company terminates their employment for any reason other than for cause or for a change in control. In the event of termination resulting from a change in control of the Company, such severance payments would extend for a total of twelve months. Each of Mr. Gavin’s and Mr. Mousseau’s letter agreements includes certain non-compete obligations which extend for eighteen months after termination of employment.

Mr. Wilson resigned his position with the Company in September 2002. As part of Mr. Wilson’s separation arrangement, the Company agreed to continue his base salary of $400,000 and benefits for a period of twelve months following his resignation. Mr. Wilson elected to receive his base salary in two lump sum payments, one paid in 2002 and the other to be paid in 2003. Mr. Wilson is also subject to certain non-compete obligations which extend for two years following the termination of his employment.

Mr. Koppel resigned his position with the Company in March 2003. The Company has agreed to continue his base salary and benefits for up to six months following his resignation as President, during which time Mr. Koppel is continuing to provide consulting serviceswas available on a projectconsulting and advisory basis. Mr. Koppel will beis subject to certain non-compete obligations which extend for three years following thehis March 2003 termination of his employment.

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Option Grant TableThe following table sets forth certain information regarding stock options granted during the year ended December 31, 20022003 by the Company to the Named Executive Officers:

Option Grants in Last Year

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Option Exercises and Year-End Values.The following table sets forth certain information regarding the aggregate shares of Common Stock acquired upon stock option exercises by the Named Executive Officers and the value realized upon such exercises during the year ended December 31, 2002,2003, as well as the number and value of unexercised stock options held by the Named Executive Officers as of December 31, 2002:2003:

Aggregate Option Exercises in Last Fiscal Year and

Year-End Option Values

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Report of the Compensation Committee

The Compensation Committee of the Board of Directors has oversight over the Company’s executive compensation programs and determines the compensation of the executive officers of the Company. The Committee also administers the Company’s stock incentive plans. The Committee consists entirely of independent, non-employee directors.

This report is submitted by the Compensation Committee and addresses the Company’s compensation policies for 20022003 as they affected Ms. Gallup and Mr. Koppel and the Company’s other executive officers. The Committee consists entirely of independent, non-employee directors.

The Compensation Committee annually sets the compensation of the Chief Executive Officer. The Compensation Committee also reviews the recommendations of the Chief Executive Officer regarding the compensation of the Company’s other executive officers. In addition, the Committee administers the Company’s stock incentive plans as recommended by the Chief Executive Officer.

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Each of the Named Executive Officers regularly makes presentations to the Board of Directors. As a result, the members of the Compensation Committee are personally familiar with the performance of each Named Executive Officer.

The Compensation Committee seeks to achieve three broad goals in connection with the Company’s compensation philosophy and decisions regarding individual compensation. First, the Company is committed to providing executive compensation designed to attract, retain, and motivate executives who contribute to the long-term success of the Company and are capable of leading the Company in achieving its business objectives in the competitive and rapidly changing industry in which the Company operates. Second, the Company wants to reward executives for the achievement of business objectives of the Company and/or the individual executive’s particular area of responsibility. By tying compensation in part to achievement, the Company believes that a performance-oriented environment is created for the Company’s executives. Finally, compensation is intended to provide executives with an equity interest in the Company so as to link a meaningful portion of the compensation of the Company’s executives with the performance of the Company’s Common Stock.

Each executive’s total compensation depends upon the executive’s performance against specific objectives assigned at the beginning of each year.objectives. These objectives include both quantitative factors related to the Company’s short-term financial objectives and qualitative factors such as (a) demonstrated leadership ability, (b) management development, (c) compliance with Company policies, and (d) anticipation of and response to changing market and economic conditions, to enhance the Company’s ability to operate profitably. Annual compensationCompensation for the Company’s executives generally consists of three elements:

salary—levels are generally set by reviewing compensation for competitive positions in the market and considering the executive’s level of responsibility, qualifications, and experience, as well as the Company’s financial performance and the individual’s performance;

bonus—amounts are generally based on achievement of the Company’s performance goals for thein any given year; and

stock option grants—options provide long-term incentives to promote and identify long-term interests between the Company’s employees and its stockholders and to assist in the retention of executives.

In addition, executives are also eligible to receive various benefits, including medical, disability, and life insurance plans, and may participate in the Company’s stock purchase plan and 401(k) qualified savings plan. All of these benefits are generally available to all employees of the Company.

In making decisions regarding executivethe compensation of the Chief Executive Officer, the Compensation Committee considered the input of the Company’s other directors and the results of an informal study conducted by membersthe Vice President of managementHuman Resources and

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presented to the Compensation Committee relating to comparable direct marketing firms of personal computers and related peripherals. In order to attract, retain, and motivate the talented personnel it needs, the Company has structured its executive compensation program to provide its employees with cash compensation competitive with total compensation paid by comparable companies. Bonuses are primarily based on corporate performance, with actual awards varying greatly according to the Company’s overall performance and the individual’s impact on that performance.

Base Salaries for 20022003

Early in 2002, the Committee reviewed base salaries for all Named Executive Officers, including Ms. Gallup and Mr. Koppel. Ms. Gallup’s salary for 2002 was set for 2003 at $430,000 and Mr. Koppel’s at $425,000. Annual$430,000. The Compensation Committee also reviewed the annual salary rateslevels for all other Named Executive Officers were based on recommendations of Ms. Gallup andOfficers. These salary levels were designed to ensure salary levels which remain competitive within the market.

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Bonus Compensation for 20022003

No namedNamed Executive Officer received a bonus for 20022003 because the Company’s operating results were less than expected.

Stock Option Awards in 20022003

The Compensation Committee reviews and approves all grants of stock options to the Company’s namedNamed Executive Officers and reviews all grants of stock options to other employees. During 2002,2003, the Named Executive Officers, other than Ms. Gallup, Mr. Wilson, and Mr. Wilkins, received grants of stock options as part of the Company’s overall program to make periodic grants of stock options to a broad range of its managerial employees. All grants of stock options in 20022003 were approvedreviewed by the full Board of Directors.

Compensation of Chief Executive Officer

The Company’s compensation plans are designed to provide incentive and reward for individual achievement and for meeting company goals. As with other executive officers, the Chief Executive Officer’s compensation reflects this philosophy. The process and factors of determining compensation for the CEO are generally the same as for other Company executives.

In September 2002, Kenneth Koppel resigned as Chief Executive Officer. Mr. Koppel continued in the role of President until his resignation of that position effective on March 21, 2003. Mr. Koppel and the Company entered into an employment arrangement more fully described under “Employment and Severance Agreements.”

In September 2002, Ms. Gallup was appointed Chief Executive Officer of the Company and assumed the position of President upon Mr. Koppel’s resignationdid not participate in March 2003.any decisions regarding her own compensation.

The Compensation Committee has determined that, based upon a review of the Company’s operations and salaries of Chief Executive Officers of comparable companies, Ms. Gallup’s salary for 20032004 will be $430,000. Ms. Gallup did not receive a bonus for 2002. Also, inIn light of her substantial current stock ownership, the Compensation Committee determined not to recommend to the Board of Directors any award of equity-based compensation. The Compensation Committee believes that Ms. Gallup’s compensation has been set at a level competitive with other companies in the industry.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally disallows a tax deduction to a public companiescompany for certain compensation in excess of $1 million paid to athe company’s Chief Executive Officer and the four other most highly compensated executive officers. Certain compensation, including qualified

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performance-based compensation, will not be subject to the deduction limit if certain requirements are met. The Compensation Committee reviews the potential effect of Section 162(m) periodically and generally seeks to structure the long-term incentive compensation granted to its executive officers through option issuances under the Company’s equity incentive plans in a manner that is intended to avoid disallowance of deductions under Section 162(m). Nevertheless, there can be no assurance that compensation attributable to awards granted under the Company’s equity incentive plans will be treated as qualified performance-based compensation under Section 162(m). In addition, the Compensation Committee reserves the right to useuses its judgment to authorize compensation payments that may be subject to the limit when the Compensation Committee believes such payments are appropriate and in the best interests of the company and its stockholders, after taking into consideration changing business conditions and the performance of its employees.

Peter Baxter, Chairman

Bruce Barone

Joseph Baute

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Compensation Committee and Interlocks and Insider Participation

The members of the Compensation Committee are Messrs. Barone, Baute, and Baxter. No member of the Compensation Committee was at any time during 2002,2003, or formerly, an officer or employee of the Company or any subsidiary of the Company. No executive officer of the Company has served as a director or member of the Compensation Committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as a director of or member of the Compensation Committee of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires the Company’s directors, executive officers, and holders of more than 10% of the Company’s Common Stock to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock of the Company. Based solely on its review of copies of reports filed by individuals required to make filings (“Reporting Persons”) pursuant to Section 16(a) of the Exchange Act or written representations from certain Reporting Persons, the Company believes that all such reports required to be filed under Section 16(a) of the Exchange Act for 20022003 were timely filed.filed, except that Mr. Beffa-Negrini, a member of the Board, failed to timely file a Form 4 in April 2003 to report the receipt of a stock option grant of 50,000 shares, and Mr. Gavin, an executive officer, failed to timely file a Form 4 in April 2003 to report the receipt of a stock option grant of 100,000 shares, and Mr. Mousseau, an executive officer, failed to timely file a Form 4 in April 2003 to report the receipt of a stock option grant of 50,000 shares, and Mr. Wilkins, an executive officer, failed to timely file a Form 4 in April 2003 to report the receipt of a stock option grant of 100,000 shares. All four reporting persons filed late the required Form 4s with the SEC on June 13, 2003.

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Stock Performance Graph

The following stock performance graph compares cumulative total stockholder return on the Company’s Common Stock for the period from March 3,December 31, 1998 the date of the Company’s initial public offering, through December 31, 20022003 with the cumulative total return for (i) the Russell 2000 Index and (ii) the Company’s Peer Group. This graph assumes the investment of $100 on March 3,December 31, 1998 in the Company’s Common Stock, (at the initial public offering price), the Russell 2000 Index, and the Company’s Peer Group and assumes dividends are reinvested. The Company’s Peer Group consists of CDW Computer Centers, Inc., PC Mall, Inc., Insight Enterprises, Inc., Zones, Inc., and Systemax, Inc.

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APPROVAL OF AMENDMENT TO 1997 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

The Board of Directors believes that the continued growth and profitability of the Company depends, in large part, upon the ability of the Company to maintain a competitive position in attracting and retaining key personnel. Accordingly, in 1997, the Company adopted an Employee Stock Purchase Plan which permits eligible employees to purchase shares of the Company’s Common Stock at a discounted price. In May 2002, the Board of Directors adopted an increase in the number of shares issuable under the 1997 Employee Stock Purchase Agreement and in June 2002, the Company’s public stockholders also approved such increase.

As of April 21, 2003, 116,964 shares remained available for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended (the “ESPP”) in semi-annual offerings. On April 28, 2003, the Board of Directors adopted, subject to stockholder approval, an amendment to the ESPP increasing the total number of shares of Common Stock available for purchase under the ESPP from 537,500 to 637,500.

Accordingly, the Board of Directors believes adoption of the amendment to the ESPP is in the best interests of the Company and its stockholders and recommends a vote “FOR” the approval of the amendment to the ESPP and the reservation of an additional 100,000 shares of Common Stock for issuance thereunder.

Description of the ESPP

The following is a brief summary of the ESPP, a copy of which is attached as Exhibit A to this Proxy Statement. The following summary is qualified in its entirety by reference to the ESPP.

General. The ESPP provides eligible employees with the opportunity to purchase shares of the Company’s Common Stock at a discounted price.

Eligibility. Each employee of the Company and its eligible subsidiaries, including any officer or director who is also an employee, is eligible to participate in the ESPP, provided he or she (i) is employed by the Company or any eligible subsidiary on the applicable offering commencement date, (ii) is customarily employed by the Company or any eligible subsidiary for 20 or more hours per week and for more than five months in a calendar year and (iii) has been employed by the Company or any eligible subsidiary for at least six months prior to enrolling in the ESPP. As of April 21, 2003, approximately 1,100 employees were eligible to participate in the ESPP. The purchase of shares under the ESPP is discretionary, and the Company cannot now determine the number of shares to be purchased in the future by any particular person or group.

Offerings. The ESPP is implemented through a series of offerings, each of which is six months in length. Participants in an offering purchase shares with funds set aside through payroll withholding. An employee may elect to have a percentage up to 10% withheld from his or her pay for purposes of purchasing shares under the ESPP, subject to certain limitations on the maximum number of shares that may be purchased.

Purchase Price. The price at which shares may be purchased during each offering is the lower of (i) 85% of the closing price of the Common Stock as reported on the Nasdaq National Market on the date that the offering commences or (ii) 85% of the closing price of the Common Stock as reported on the Nasdaq National Market on the date that the offering terminates.

Holding Period. Eligible employees participating in any offering beginning on or after July 1, 2002 are required to hold shares purchased in such offering for a period of at least one year following the date that the offering terminates.

Number of Shares; Adjustments. The maximum number of shares issuable under the ESPP prior to the proposed amendment is 537,500 shares. The ESPP contains provisions relating to adjustments to be made under the ESPP in the event of stock splits and other similar events and certain mergers, acquisitions and other extraordinary corporate transactions involving the Company.

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Administration. The ESPP is administered by the Board of Directors of the Company, which has the authority to make rules and regulations for the administration of the ESPP. Pursuant to the terms of the ESPP, the Board of Directors may delegate authority under the ESPP to a committee of the Board.

Amendment or Termination. The Board of Directors may at any time terminate or amend the ESPP, provided that no amendment may be made without prior approval of the stockholders of the Company if such approval is required by Section 423 of the Code, and in no event may any amendment be made which would cause the ESPP to fail to comply with Section 423 of the Code.

Federal Income Tax Consequences

The following generally summarizes the United States federal income tax consequences that will arise with respect to participation in the ESPP and with respect to the sale of common stock acquired under the ESPP. This summary is based on the tax laws in effect as of the date of this proxy statement. Changes to these laws could alter the tax consequences described below.

Tax Consequences to Participants. A participant will not have income upon enrolling in the ESPP or upon purchasing stock at the end of an offering.

A participant may have both compensation income and capital gain income or both compensation income and a capital loss upon the sale of stock that was acquired under the ESPP. The amount of each type of income and loss will depend on when the participant sells the stock.

If the participant sells the stock more than two years after the commencement of the offering during which the stock was purchased and more than one year after the date that the participant purchased the stock, then the participant will have compensation income equal to the lesser of:

Any excess profit will be long-term capital gain. If the participant sells the stock at a loss (if sales proceeds are less than the purchase price) after satisfying these waiting periods, then the loss will be a long-term capital loss.

If the participant sells the stock prior to satisfying these waiting periods, then he or she will have engaged in a disqualifying disposition. Upon a disqualifying disposition, the participant will have compensation income equal to the value of the stock on the day he or she purchased the stock less the purchase price. If the participant’s profit exceeds the compensation income, then the excess profit will be capital gain. If the participant’s profit is less than the compensation income, then the participant will have a capital loss equal to the value of the stock on the day he or she purchased the stock less the sales proceeds. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.

Tax Consequences to the Company. There will be no tax consequences to the Company except that we will be entitled to a deduction when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m) of the Code.

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Equity Compensation Plan Information

The following table provides information about the Company’s common stock that may be issued upon exercise of options, warrants, and rights under all of the Company’s equity compensation plans as of December 31, 2002,2003, including the 1993 Incentive and Non-Statutory Stock Option Plan (the “1993 Plan”), as amended, the 1997 Stock Incentive Plan, as amended, and the Company’s ESPP.Employee Stock Purchase Plan (the “ESPP”). The Company’s stockholders have approved all of these plans.

RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS

The Audit Committee of the Board of Directors has selected the firm of Deloitte & Touche LLP, independent auditors, to serve as the Company’s independent auditors for the fiscal year ending December 31, 2003.2004. The ratification and approval of this selection is not required under the laws of the State of Delaware, where the Company is incorporated, but the results of this vote will be considered by the Audit Committee and the Board of Directors in selecting the Company’s independent auditors. Deloitte & Touche LLP has served as the Company’s independent auditors since 1984. It is expected that a member of Deloitte & Touche LLP will be present at the meeting with the opportunity to make a statement if so desired and will be available to respond to appropriate questions from stockholders.

The Board of Directors recommends a vote “FOR” the ratification of the selection of Deloitte & Touche LLP as the Company’s independent auditors.

Additional Information

Independent Auditors Fees

The following table summarizes the fees Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their affiliates (“Deloitte”Deloitte & Touche”) billed the Company an aggregate of $553,000for audit and $642,000 in fees for professionalother services in 2003 and 2002, and 2001, respectively. The following table provides information about these fees. The Audit Committee of the Company’s Board of Directors believes that the non-audit services described below did not compromise Deloitte’sDeloitte & Touche’s independence.

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Pre-Approval Policies and Procedures

These fees consistFrom time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to the Company by its independent auditor during the next twelve months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

The Audit Committee may also delegate to each individual member of the following in 2001:Audit Committee the authority to approve any audit or non-audit services to be provided to the Company by its independent auditor. Any approval of services by a member of the Audit Committee pursuant to this delegated authority is reported on at the next meeting of the Audit Committee.

Report of the Audit Committee

The Audit Committee of the Company’s Board of Directors is composed of three members and acts under a revised written charter adopted and approved in March 2004. A copy of the Audit Committee Charter is attached as Appendix A to this proxy statement. In accordance with its written charter adopted by the Board of Directors, (“the Board”), the Audit Committee (“the Committee”) assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and financial reporting practices of the Company and other such duties as directed by the Board. Each member of the Audit Committee is free of any relationship that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgment, and meets the director independence requirements for serving on audit committees as set forth in the Audit Committee Charter and in the corporate governance standards of the Nasdaq National Stock Market.

A copy of the Company’s Audit Committee Charter is filed as Annex A to the Company’s proxy statement for the 2001 Annual Meeting of Stockholders, filed with the SEC on April 17, 2001, and is available on the SEC’s website atwww.sec.gov.

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During fiscal year 2002,2003, the Audit Committee discussed the interim financial information contained in each quarterly earnings announcement with the Chief Financial Officer and independent auditors prior to public release.

In discharging its oversight responsibility as to the audit process, the Audit Committee obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the auditors’ independence, consistent with Independence Standards Board Standard No. 1, “Independence Discussions with Audit Committees,” discussed with the auditors any relationships that may impact their objectivity and independence, and satisfied itself as to the auditors’ independence. The Audit Committee also discussed with management and the independent auditors the quality and adequacy of the Company’s internal controls. The Audit Committee reviewed with the independent auditors their audit plans, audit scope, and identification of audit risks. The Audit Committee also considered whether the independent auditors’ provision of certain other, non-audit related services to the Company, which are referred to in this Proxy Statement under the heading “Ratification of Selection of Independent Auditors,” is compatible with maintaining such auditors’ independence.

Management represented to the Audit Committee that the Company’s financial statements had been prepared in accordance with generally accepted accounting principles.

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The Audit Committee discussed and reviewed with the independent auditors all matters required by Statement on Auditing Standards No. 61, as amended, “Communication with Audit Committees” including the following:

The Audit Committee, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the financial statements.

The Audit Committee reviewed the audited financial statements of the Company as of and for the year ended December 31, 20022003 with management and the independent auditors. Management is responsible for the preparation of the Company’s financial statements and the independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America and issuing a report on the financial statements. As appropriate, the Audit Committee reviews and evaluates and discusses with the Company’s management, internal accounting, financial, and auditing personnel, and the independent auditors, the following:

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Based on the above-mentioned review and discussions with management and the independent auditors, and its review of the representations and information provided by management and the independent auditors, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2002,2003, for filing with the Securities and Exchange Commission. The Audit Committee also recommended the reappointment, subject to shareholder approval, of the independent auditors and the Board concurred in such recommendation.

Joseph Baute, Chairman

Bruce Barone

Peter Baxter

ADDITIONAL INFORMATION

Matters to be Considered at the Annual Meeting

The Board of Directors does not know of any other matters which may come before the Annual Meeting. However, if any other matters are properly presented to the Annual Meeting, it is the intention of persons named in the accompanying proxy to vote, or otherwise act, in accordance with their judgment on such matters.

Householding of Annual Meeting Materials

Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of the Company’s proxy

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statement or annual report may have been sent to multiple stockholders in your household. The Company will promptly deliver a separate copy of either document to you if you write or call us at the following address or phone number: PC Connection, Inc., Attention: Investor Relations, 730 Milford Road, Merrimack, New Hampshire 03054 (603-423-2000)(603-683-2000). If you wish to receive separate copies of the annual report and proxy statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact the Company at the above address and phone number.

Solicitation of Proxies

All costs of solicitations of proxies will be borne by the Company. In addition to solicitations by mail, the Company’s directors, officers, and regular employees, without additional remuneration, may solicit proxies by telephone, telegraph, and personal interviews. The Company will also request brokers, custodians, and fiduciaries to forward proxy soliciting material to the owners of stock held in their names, and the Company will reimburse them for their out-of-pocket expenses in this regard.

Deadline for Submission of Stockholder Proposals

Proposals of stockholders intended to be presented at the 20042005 Annual Meeting of Stockholders must be received by the Company at its principal office in Merrimack, New Hampshire not later than January 2,December 30, 2004, for inclusion in the proxy statement for that meeting.

If a stockholder of the Company who holds less than 40% of the shares of capital stock of the Company issued and outstanding and entitled to vote wishes to present a proposal before the 20042005 Annual Meeting but has not complied with the requirements for inclusion of such proposal in the Company’s proxy materials pursuant to Rule 14a-8 under the Exchange Act, such stockholder must give notice of such proposal to the Secretary of the Company at the principal offices of the Company. The required notice must be made in writing and delivered or mailed and received at the principal executive offices of the Company not later than April 15, 20049, 2005 nor earlier than March 5, 2004.10, 2005. Notwithstanding the foregoing, if the Company provides less than 70 days notice or prior public disclosure of the date of the meeting to the stockholders, notice by the stockholders must be received by the Secretary not later than the close of business on the tenth day following the date on which the notice of the meeting was mailed or such public disclosure was made, whichever occurs first.

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The advance notice provisions of the Company’s bylaws supercede the notice requirements contained in the recent amendments to Rule 14a-8 under the Exchange Act.

By Order of the Board of Directors,

Steven Markiewicz

April 30, 200329, 2004

THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE APPRECIATED.

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EXHIBITAPPENDIX A

PC CONNECTION, INC.

1997 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDEDAUDIT COMMITTEE CHARTER

November 21, 1997

Amended on May 16, 2002 and April 28, 2003

The purpose of this Planthe Audit Committee is to provide eligible employeesassist the Board of PC Connection, Inc., a Delaware corporation (the “Company”), and certain of its U.S. subsidiaries with opportunities to purchase sharesDirectors’ oversight of the Company’s common stock, $.01 par value per share (the “Common Stock”), commencing on January 1, 1999. Three Hundred Thirty-Seven Thousand Five Hundred (337,500) sharesaccounting and financial reporting processes and the audits of Common Stock in the aggregate have been reserved for this purpose.Company’s financial statements.

1.    AdministrationNumber.    The Plan will be administeredExcept as otherwise permitted by the Company’sapplicable Nasdaq rules, the Audit Committee shall consist of at least three members of the Board of Directors (the “Board”) or by the Compensation Committee appointed by the Board (the “Committee”). The Board or the Committee has authority to make rules and regulations for the administration of the Plan, to determine any brokerage and other fees to be paid or subsidized by the Company, and to determine the number of shares in each Offering; its interpretation and decisions with regard thereto shall be final and conclusive.Directors.

2.    EligibilityIndependence.    ParticipationExcept as otherwise permitted by the applicable Nasdaq rules, each member of the Audit Committee shall be independent as defined by Nasdaq rules, meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act (subject to the exemptions provided in Rule 10A-3(c)), and not have participated in the Plan will neither be permitted nor denied contrary to the requirements of Section 423preparation of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations promulgated thereunder. All employees of the Company, including Directors who are employees, and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan provided that:

(a)    they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year; and

(b)    they have been employed by the Company or a Designated Subsidiary for at least six months prior to enrolling in the Plan; and

(c)    they are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period (as defined below).

No employee may be granted an option hereunder if such employee, immediately after the option is granted, owns 5% or more of the total combined voting power or value of the stockfinancial statements of the Company or any subsidiary. For purposescurrent subsidiary of the preceding sentence,Company at any time during the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock which the employee has a contractual right to purchase shall be treated as stock owned by the employee.past three years.

3.    OfferingsFinancial Literacy.    The Company will make one or more offerings (each, an “Offering”) to employees to purchase shares of Common Stock under this Plan. Offerings will begin each January 1 and July 1, or the first business day thereafter (the “Offering Commencement Dates”).    Each Offering Commencement Date will beginmember of the Audit Committee must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, and cash flow statement, at the time of his or her appointment to the Audit Committee. In addition, at least one member must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a six-monthchief executive officer, chief financial officer or one-year period (a “Plan Period”) duringother senior officer with financial oversight responsibilities. Unless otherwise determined by the Board of Directors (in which payroll deductions willcase disclosure of such determination shall be made and held forin the purchase of Common StockCompany’s annual report filed with the SEC), at the endleast one member of the Plan Period.Audit Committee shall be an “audit committee financial expert” (as defined by applicable SEC rules).

4.    ParticipationChair.    An employee eligible onUnless the Offering Commencement DateBoard of Directors elects a Chair of the Audit Committee, the Audit Committee shall elect a Chair by majority vote.

5.    Compensation.    The compensation of Audit Committee members shall be as determined by the Board of Directors. No member of the Audit Committee may receive, directly or indirectly, any Offeringconsulting, advisory or other compensatory fee from the Company or any of its subsidiaries, other than fees paid in his or her capacity as a member of the Board of Directors or a committee of the Board.

6.    Selection and Removal.    Members of the Audit Committee shall be appointed by the Board of Directors. The Board of Directors may participateremove members of the Audit Committee from such committee, with or without cause.

General

The Audit Committee shall discharge its responsibilities, and shall assess the information provided by the Company’s management and the independent auditor, in such Offeringaccordance with its business judgment. Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements and for the appropriateness of the accounting principles and reporting policies that are used by completingthe Company. The independent auditors are responsible for auditing the Company’s financial statements and forwarding a payroll deduction authorization form tofor reviewing the

Company’s unaudited interim financial statements. The authority and responsibilities set forth in this Charter do

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employee’s appropriate payroll office,not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit, to determine or certify that the Company’s financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee the independent auditor’s report.

Oversight of Independent Auditors

1.    Selection.    The Audit Committee shall be solely and directly responsible for appointing, evaluating, retaining, and when necessary, terminating the engagement of the independent auditor. The Audit Committee may, in its discretion, seek stockholder ratification of the independent auditor it appoints.

2.    Independence.    The Audit Committee shall take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the independent auditor. In connection with this responsibility, the Audit Committee shall obtain and review a formal written statement from the independent auditor describing all relationships between the auditor and the Company, including the disclosures required by Independence Standards Board Standard No. 1. The Audit Committee shall actively engage in dialogue with the auditor concerning any other manner determined to be appropriatedisclosed relationships or services that might impact the objectivity and independence of the auditor.

3.    Compensation.    The Audit Committee shall have sole and direct responsibility for setting the compensation of the independent auditor. The Audit Committee is empowered, without further action by the Board orof Directors, to cause the Company to pay the compensation of the independent auditor established by the Audit Committee.

4.    Preapproval of Services.    The Audit Committee (“Appropriate Authorization”), at least ten (10) days priorshall preapprove all audit services to be provided to the applicable Offering Commencement Date. The Appropriate Authorization will authorize a regular payroll deduction from the Compensation receivedCompany, whether provided by the employee during the Plan Period. Unless an employee notifiesprincipal auditor or other firms, and all other services (review, attest, and non-audit) to be provided to the Company of a new Appropriate Authorization or withdraws fromby the Plan, his deductions and purchases will continue at the same rate for future Offerings under the Plan as long as the Plan remainsindependent auditor; provided, however, that de minimis non-audit services may instead be approved in effect. The term “Compensation” means the amount of money reportable on the employee’s Federal Income Tax Withholding Statement, excluding allowances and reimbursements for expenses such as relocation allowances, travel expenses, income or gains on the exercise of Company stock options or stock appreciation rights, whether or not shown on the employee’s Federal Income Tax Withholding Statement, but including, in the case of salespersons, sales commissions.accordance with applicable SEC rules.

5.    DeductionsOversight.    The independent auditor shall report directly to the Audit Committee, and the Audit Committee shall have sole and direct responsibility for overseeing the work of the independent auditor, including resolution of disagreements between Company management and the independent auditor regarding financial reporting. In connection with its oversight role, the Audit Committee shall, from time to time as appropriate, receive and consider the reports required to be made by the independent auditor regarding:

—    critical accounting policies and practices;

—    alternative treatments within generally accepted accounting principles for policies and practices related to material items that have been discussed with Company management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and

—    other material written communications between the independent auditor and Company management.

Audited Financial Statements

6.    Review and Discussion.    The Audit Committee shall review and discuss with the Company’s management and independent auditor the Company’s audited financial statements, including the matters about which Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU §380) requires discussion.

7.    Recommendation to Board Regarding Financial Statements.    The Audit Committee shall consider whether it will maintain payroll deduction accountsrecommend to the Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K.

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8.    Audit Committee Report.    The Audit Committee shall prepare an annual committee report for inclusion where necessary in the proxy statement of the Company relating to its annual meeting of security holders.

Review of Other Financial Disclosures

9.    Independent Auditor Review of Interim Financial Statements.    The Audit Committee shall direct the independent auditor to use its best efforts to perform all participating employees. Withreviews of interim financial information prior to disclosure by the Company of such information and to discuss promptly with the Audit Committee and the Chief Financial Officer any matters identified in connection with the auditor’s review of interim financial information which are required to be discussed by applicable auditing standards. The Audit Committee shall direct management to advise the Audit Committee in the event that the Company proposes to disclose interim financial information prior to completion of the independent auditor’s review of interim financial information.

10.    Earnings Release and Other Financial Information.    The Audit Committee shall discuss generally the types of information to be disclosed in the Company’s earnings press releases, as well as in financial information and earnings guidance provided to analysts, rating agencies, and others.

11.    Quarterly Financial Statements.    The Audit Committee shall discuss with the Company’s management and independent auditor the Company’s quarterly financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Controls and Procedures

12.    Oversight.    The Audit Committee shall coordinate the Board of Directors’ oversight of the Company’s internal control over financial reporting, disclosure controls, and procedures and code of conduct. The Audit Committee shall receive and review the reports of the CEO and CFO required by Rule 13a-14 of the Exchange Act.

13.    Procedures for Complaints.    The Audit Committee shall establish procedures for (i) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

14.    Related-Party Transactions.    The Audit Committee shall review all “related party transactions” (defined as transactions required to be disclosed pursuant to Item 404 of Regulation S-K) on an ongoing basis, and all such transactions must be approved by the Audit Committee.

15.    Risk Management.    The Audit Committee shall discuss the Company’s policies with respect to any Offering made under this Plan, an employee may authorize a payroll deduction in any dollar amount uprisk assessment and risk management, including guidelines and policies to a maximum of 10% ofgovern the Compensation he receives duringprocess by which the Plan Period. In no event may an employee’s total payroll deductions during a calendar year exceed $20,000.Company’s exposure to risk is handled.

16.    Additional Powers.    The minimum payroll deduction isAudit Committee shall have such percentage of Compensationother duties as may be establisheddelegated from time to time by the Board or the Committee.of Directors.

No employee may be granted an Option (as defined in Section 9) which permits his rights to purchase Common Stock under this Plan and any other employee stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined as of the last business day of the Plan Period) for each calendar year in which the Option is outstanding at any time.

6.1.    Deduction ChangesMeetings.    An employeeThe Audit Committee shall meet as often as it deems necessary in order to perform its responsibilities. The Audit Committee may increase, decrease or discontinue his or her payroll deduction once during any Plan Period,also act by effecting a new Appropriate Authorization. If an employee elects to discontinue his or her payroll deductions during a Plan Period, but does not elect to withdraw his or her funds pursuant to Section 8 hereof, funds deducted prior to his or her election to discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below).

7.    Interest.    Interest will not be paid on any employee accounts.

8.    Withdrawal of Funds.    An employee may at any time prior to the close of business on the last business day in a Plan Period and for any reason permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering. Partial withdrawals are not permitted. Any employee who withdraws from participation in an Offering shall not be permitted to participate in the Plan again until the start of the next Plan Period.

9.    Purchase of Shares.    On the Offering Commencement Date of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option (“Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”), at the Option Price hereinafter provided for, the largest number of whole shares of Common Stock of the Company as does not exceed the number of shares determined by dividing $12,500 (in the case of a six-month Plan Period) or $25,000 (in the case of a one-year Plan Period) by the closing price (as defined below) on the Offering Commencement Date of such Plan Period.

The purchase price for each share purchased will be 85% of the closing price of the Common Stock on (i) the first business day of such Plan Period or (ii) the Exercise Date, whichever closing price shall be less. Such closing price shall be (a) the closing price on any national securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq National Market or (c) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in The Wall Street Journal. If no sales of Common Stock were made on such a day, the price of the Common Stock for purposes of clauses (a) and (b) above shall be the reported price for the next preceding day on which sales were made.

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Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised his or her Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of full shares of Common Stock reserved for the purpose of the Plan that his or her accumulated payroll deductions on such date will pay for, but not in excess of the maximum number determined in the manner set forth above.

Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period will be automatically refunded to the employee, except that any balance which is less than the purchase price of one share of Common Stock will be carried forward into the employee’s payroll deduction account for the following Offering, unless the employee elects not to participate in the following Offering under the Plan, in which case the balance in the employee’s account shall be refunded.

10.    Issuance of Certificates.    Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Company’s sole discretion) in the name of a brokerage firm, bank or other nominee holder designated by the employee. The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book entry registration of sharesunanimous written consent in lieu of issuing stock certificates.

11.    Rights on Retirement, Death or Termination of Employment.    In the event of a participating employee’s termination of employment prior to the last business day of a Plan Period, no payroll deduction shall be taken from any pay due and owing to an employee and the balance in the employee’s account shall be paid to the employee or, in the event of the employee’s death, (a) to a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent required under state law) or (b) in the absence of such a designated beneficiary, to the executor or administrator of the employee’s estate or (c) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate.

12.    Optionees Not Stockholders.    Neither the granting of an Option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to him or her.

13.    Rights Not Transferable.    Rights under this Plan are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.

14.    Application of Funds.    All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose.

15.    Adjustment in Case of Changes Affecting Common Stock.    In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares reserved for issuance under this Plan, the number of shares issuable in any Offering, and the share limitation set forth in Section 9, shall be increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock, such adjustment shall be made as may be deemed equitable by the Board or the Committee to give proper effect to such event.

16.    Merger.    In the event of a proposed sale of all or substantially all of the assets of the Company or a merger or consolidation of the Company with or into another corporation (other than a merger in which the Company is the surviving corporation and the holders of the capital stock of the Company immediately prior to such merger continue to hold at least 50% by voting power of the capital stock of the Company) or the proposed dissolution or liquidation of the Company during a Plan Period, the Board or themeeting. The Audit Committee shall set a newperiodically meet separately with: (i) the independent auditor; (ii) Company management and (iii) the Company’s internal auditors. The Audit Committee shall keep such records of its meetings as it shall deem appropriate.

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Exercise Date (the “New Exercise Date”) for such Plan Period,2.    Subcommittees.    The Audit Committee may form and such Plan Period shall end on the New Exercise Date. The New Exercise Date shall be before the date of such asset sale, merger, consolidation, dissolutiondelegate authority to one or liquidation. The Board or the Committee shall send written notice to each employee participating in the Offering for such Plan Period, at least ten business days prior to the New Exercise Date, that the Exercise Date for such Offering has been changed to the New Exercise Date and that the employee’s Option shall be exercised automatically on the New Exercise Date, unless prior to such date the employee has withdrawn from such Offering as provided in Section 8 hereof.

16A.    Holding Period.    Beginning on July 1, 2002 and each Plan Period thereafter, no employee participating in the Plan may sell or in any way transfer (other than by testamentary or intestate disposition) shares acquired under the Plan formore subcommittees (including a period of one year following the Exercise Datesubcommittee consisting of a Plan Period.

17.    Amendment of the Plan.    The Board may at any time, andsingle member), as it deems appropriate from time to time amend this Plan in any respect, except that (a) ifunder the approvalcircumstances. Any decision of any such amendment bya subcommittee to preapprove audit, review, attest, or non-audit services shall be presented to the shareholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Section 423 of the Code.full Audit Committee at its next scheduled meeting.

18.3.    Insufficient SharesReports to Board.    In the event that the total number of shares of Common Stock specified in electionsThe Audit Committee shall report regularly to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available on a pro rata basis. Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period due to an insufficiency of shares will be refunded to the employee without interest.Directors.

19.4.    Termination of the PlanCharter.    This Plan may be terminated at any time byAt least annually, the Board. Upon terminationAudit Committee shall review and reassess the adequacy of this Plan all amounts inCharter and recommend any proposed changes to the accountsBoard of participating employees shall be promptly refunded.Directors for approval.

20.5.    Governmental RegulationsIndependent Advisors.    The Company’s obligation to sell and deliver Common Stock under this PlanAudit Committee is subject to listing on a national stock exchange or quotation on the Nasdaq National Market and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.

21.    Governing Law.    The Plan shall be governed by New Hampshire law except to the extent that such law is preempted by federal law.

22.    Issuance of Shares.    Shares may be issued upon exercise of an Option from authorized, but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.

23.    Notification upon Sale of Shares.    Each employee agrees, by entering the Plan, to promptly give the Company notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased.

24.    Effective Date and Approval of Shareholders.    The Plan shall take effect on January 1, 1999, but is subject to approval by the stockholders of the Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Plan by the Board.

Adoptedwithout further action by the Board of Directors,

on November 21, 1997

Approved to engage such independent legal, accounting, and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be the regular advisors to the Company. The Audit Committee is empowered, without further action by the stockholders onBoard of Directors, to cause the Company to pay the compensation of such advisors as established by the Audit Committee.

February 17, 1998

6.    Investigations.    The Audit Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate, including the authority to request any officer, employee, or advisor of the Company to meet with the Audit Committee or any advisors engaged by the Audit Committee.

7.    Funding.    The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

8.    Annual Self-Evaluation.    At least annually, the Audit Committee shall evaluate its own performance.

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Amendment No. 1 to

PC Connection, Inc.

1997 Employee Stock Purchase Plan

The last sentence of the first paragraph is hereby deleted in its entirety and the following is inserted

in lieu thereof:

“Five Hundred Thirty-Seven Thousand Five Hundred (537,500) shares of Common Stock in the

aggregate have been reserved for this purpose”

Amendment Adopted by the Board of Directors on May 16, 2002

Amendment Approved by the stockholders on June 18, 2002

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Amendment No. 2 to

PC Connection, Inc.

1997 Employee Stock Purchase Plan

The last sentence of the first paragraph is hereby deleted in its entirety and the following is

Inserted in lieu thereof:

“Six Hundred Thirty-Seven Thousand Five Hundred (637,500) shares of Common Stock

in the aggregate have been reserved for this purpose.”

Amendment Adopted by the Board of Directors on April 28, 2003

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PC CONNECTION, INC.

ANNUAL MEETING OF STOCKHOLDERS

To be held on June 3, 20038, 2004

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY

The undersigned, revoking all prior proxies, hereby appoints Patricia Gallup and David Hall, each of them, with full power of substitution, as Proxies to represent and vote as designated hereon all shares of stock of PC Connection, Inc. (the “Company”) which the undersigned would be entitled to vote if personally present at the 20032004 Annual Meeting of Stockholders of the Company to be held on Tuesday, June 3, 20038, 2004 at the Crowne Plaza Hotel, 2 Somerset Parkway (Exit 8 on the Everett Turnpike),Nashua Marriott, 2200 Southwood Drive, Nashua, New Hampshire, at 10:00 a.m., Eastern Standard Time, and attime, or any adjournment thereof, with respect to the matters set forth on the reverse side hereof.

PLEASE FILL IN, DATE, SIGN, AND MAIL THIS PROXY IN THE ENCLOSED

RETURN ENVELOPE.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

DETACH HERE

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL DIRECTOR NOMINEES.

Nominees: Patricia Gallup, David Hall, Bruce Barone, David Beffa-Negrini, Peter Baxter, and Joseph Baute.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT     ¨

MARK HERE IF YOU PLAN TO ATTEND THE MEETING     ¨

In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

Please sign exactly as name appears hereon. If the stock is registered in the names of two or more persons, each should sign. When signing as an executor, administrator, trustee, guardian, or attorney, please give full corporate name by an authorized officer. If a partnership, please sign in full partnership name by an authorized person.