As filed with the Securities and Exchange Commission on December 1, 2000
                                                           Registration No. 333-
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           The Securities Act of 1933
                                 --------------

                             PINNACLE SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)
                                 --------------

        California                                      94-3003809
 (State of incorporation)                (I.R.S. Employer Identification Number)

                            280 North Bernardo Avenue
                         Mountain View, California 94043
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)
                                 --------------
                        1994 EMPLOYEE STOCK PURCHASE PLAN
                             1996 STOCK OPTION PLAN
                       1996 SUPPLEMENTAL STOCK OPTION PLAN
                            (Full title of the plan)
                                 --------------
                                 MARK L. SANDERS
                      President and Chief Executive Officer
                             PINNACLE SYSTEMS, INC.
                            280 North Bernardo Avenue
                         Mountain View, California 94043
                                 (650) 526-1600
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                                 --------------
                                   Copies to:
                             CHRIS F. FENNELL, ESQ.
                        Wilson Sonsini Goodrich & Rosati
                            Professional Corporation
                               650 Page Mill Road
                               Palo Alto, CA 94304
                                 (650) 493-9300
                                 --------------
<TABLE>
                                                CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<CAPTION>
                                                                          Proposed               Proposed
                                                                           Maximum                Maximum
          Title of Each Class                      Amount                 Offering               Aggregate            Amount of
            of Securities to                       to be                    Price                Offering            Registration
             be Registered                       Registered               Per Share                Price                 Fee
------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                       <C>                   <C>                    <C>
Common Stock, no par value,  and related
Preferred Share Purchase Rights.......         8,566,372 shares          $ 9.625               $ 82,451,330.50        $ 21,767.15
====================================================================================================================================
<FN>
  (1)   Calculated  in  accordance  with Rule  457(c)  solely for the purpose of
        computing the amount of the  registration  fee based upon the average of
        the high and low prices for the Common  Stock as  reported on the Nasdaq
        National Market on November 27, 2000.
</FN>
</TABLE>
  The contents of the Registrant's Form S-8 Registration Statement (Registration
  No.  33-89706) as filed with the  Commission  on February  23, 1995,  Form S-8
  Registration  Statement   (Registration  No.  333-02816)  as  filed  with  the
  Commission on March 27, 1996, Form S-8  Registration  Statement  (Registration
  No.  333-16999) as filed with the  Commission  on November 27, 1996,  Form S-8
  Registration  Statement   (Registration  No.  333-25697)  as  filed  with  the
  Commission on April 23, 1997, Form S-8  Registration  Statement  (Registration
  No.  333-34759)  as filed with the  Commission  on August 29,  1997,  Form S-8
  Registration  Statement   (Registration  No.  333-74071)  as  filed  with  the
  Commission on March 8, 1999, Form S-8 Registration Statement (Registration No.
  333-75935)  as  filed  with  the  Commission  on  April  8,  1999,   Form  S-8
  Registration  Statement   (Registration  No.  333-85895)  as  filed  with  the
  Commission   on  August  25,   1999  and  Form  S-8   Registration   Statement
  (Registration No. 333-30492) as filed with the Commission on February 16, 2000
  are incorporated herein by reference.
  ==============================================================================

<PAGE>

             PART II: INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 8          Exhibits

Exhibit

Number                                 Documents
-----------     ------------------------------------------------------------
4.1             1994 Employee Stock Purchase Plan, as amended

4.2             1996 Stock Option Plan, as amended

4.3             1996 Supplemental Stock Option Plan, as amended

5.1             Opinion of counsel as to legality of securities being registered

23.1            Consent of Counsel (contained in Exhibit 5.1)

23.2            Consent of KPMG LLP, Independent Auditors

24.1            Power of Attorney (see page II 2)




<PAGE>



                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
Registrant,  Pinnacle Systems, Inc., certifies that it has reasonable grounds to
believe  that it meets all of the  requirements  for  filing on Form S-8 and has
duly  caused  this  Registration  Statement  to be signed  on its  behalf by the
undersigned,  thereunto duly authorized,  in the city of Mountain View, State of
California, on this 27th day of November, 2000.

                                      PINNACLE SYSTEMS, INC.



                                      By:  /s/ Mark L. SANDERS
                                          --------------------------------------
                                           Mark L. Sanders
                                           President and Chief Executive Officer

                                POWER OF ATTORNEY

         KNOW ALL  PERSONS  BY THESE  PRESENTS,  that  each  such  person  whose
signature appears below constitutes and appoints jointly and severally,  Mark L.
Sanders  and Arthur D.  Chadwick  his  attorney-in-fact,  each with the power of
substitution,  for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8 (including post-effective amendments), and to
file the same,  with all exhibits  thereto,  and other  documents in  connection
therewith,  with the Securities and Exchange  Commission,  hereby  ratifying and
confirming  all  that  each  of said  attorneys-in-fact,  or his  substitute  or
substitutes, may do or cause to be done by virtue hereof.


<PAGE>


<TABLE>
         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:
<CAPTION>
                   Signature                                         Title                                Date
-----------------------------------               -------------------------------------------      -------------------
<S>                                               <C>                                              <C>
              /s/ MARK L. SANDERS                 President, Chief Executive Officer and
-----------------------------------               Director (Principal Executive Officer)           November 27, 2000
                 (Mark L. Sanders)


            /s/ ARTHUR D. CHADWICK                Vice President, Finance and Administration
-----------------------------------               and Chief Financial Officer (Principal           November 27, 2000
              (Arthur D. Chadwick)                Financial and Accounting Officer)


                /s/ AJAY CHOPRA                   Chairman of the Board and Vice President,        November 27, 2000
----------------------------------                Desktop Products
                 (Ajay Chopra)


             /s/ GLENN E. PENISTEN                Director                                         November 27, 2000
----------------------------------
               Glenn E. Penisten)


            /s/ CHARLES J. VAUGHAN                Director                                         November 27, 2000
----------------------------------
              Charles J. Vaughan)


                /s/ JOHN LEWIS                    Director                                         November 27, 2000
---------------------------------
                  (John Lewis)


</TABLE>


                                                   -2-
<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                          ---------------------------

                                    EXHIBITS

                          ---------------------------

                       Registration Statement on Form S-8

                             Pinnacle Systems, Inc.

                                December 1, 2000


<PAGE>


                                INDEX TO EXHIBITS

Exhibit

Number                        Documents
----------      ------------------------------------------------------------

4.1             1994 Employee Stock Purchase Plan, as amended

4.2             1996 Stock Option Plan, as amended

4.3             1996 Supplemental Stock Option Plan, as amended

5.1             Opinion of counsel as to legality of securities being registered

23.1            Consent of Counsel (contained in Exhibit 5.1)

23.2            Consent of KPMG LLP, Independent Auditors

24.1            Power of Attorney (see page II 2)



<PAGE>



                                                                     Exhibit 4.1

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN
                           (as amended October, 2000)

         The following  constitute  the  provisions  of the 1994 Employee  Stock
Purchase Plan of Pinnacle Systems, Inc.

         1.  Purpose.  The  purpose of the Plan is to provide  employees  of the
Company and its Designated  Subsidiaries  with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an  "Employee  Stock  Purchase  Plan"
under  Section  423 of the  Internal  Revenue  Code of  1986,  as  amended.  The
provisions  of the Plan,  accordingly,  shall be  construed  so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2.  Definitions.

                  (a) "Board" shall mean the Board of Directors of the Company.

                  (b) "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended.

                  (c) "Common Stock" shall mean the Common Stock of the Company.

                  (d)  "Company"  shall  mean  Pinnacle  Systems,  Inc.  and any
Designated Subsidiary of the Company.

                  (e)  "Compensation"  shall mean all base  straight  time gross
earnings, excluding commissions,  payments for overtime, shift premium, variable
compensation, incentive payments, bonuses, and other cash compensation.

                  (f)  "Designated  Subsidiaries"  shall  mean the  Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

                  (g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose  customary  employment with the Company is at
least  twenty (20) hours per week and more than five (5) months in any  calendar
year. For purposes of the Plan, the employment  relationship shall be treated as
continuing  intact  while  the  individual  is on sick  leave or other  leave of
absence  approved by the Company.  Where the period of leave exceeds ninety (90)
days and the  individual's  right to  reemployment  is not guaranteed  either by
statute  or by  contract,  the  employment  relationship  will be deemed to have
terminated on the 91st day of such leave.

                  (h)  "Enrollment  Date"  shall  mean  the  first  day of  each
Offering Period.

                  (i)  "Exercise  Date" shall mean the last day of each Purchase
Period.

                  (j) "Fair Market Value" shall mean, as of any date,  the value
of Common Stock determined as follows:

<PAGE>

                           (i) If the Common Stock is listed on any  established
stock exchange or a national  market system,  including  without  limitation the
Nasdaq National Market of the National  Association of Securities Dealers,  Inc.
Automated  Quotation  ("Nasdaq")  System,  its Fair  Market  Value  shall be the
closing  sale price for the  Common  Stock (or the mean of the  closing  bid and
asked  prices,  if no sales were  reported),  as quoted on such exchange (or the
exchange  with the greatest  volume of trading in Common Stock) or system on the
date of such determination, as reported in The Wall Street Journal or such other
source as the Board deems  reliable,  or;

                           (ii) If the  Common  Stock is  quoted  on the  Nasdaq
System (but not on the  National  Market  thereof) or is  regularly  quoted by a
recognized  securities  dealer but  selling  prices are not  reported,  its Fair
Market  Value  shall be the mean of the  closing  bid and asked  prices  for the
Common Stock on the date of such  determination,  as reported in The Wall Street
Journal or such  other  source as the Board  deems  reliable,  or;

                           (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

                  For purposes of the  Enrollment  Date under the first Offering
Period under the Plan,  the Fair Market Value shall be the initial  price to the
public as set forth in the final  Prospectus  included  within the  Registration
Statement on Form S-1 filed with the Securities and Exchange  Commission for the
initial public offering of the Company's Common Stock.

                  (k) "Offering  Period" shall mean the period of  approximately
twenty-four  (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after May 1 and November
1 of each year and  terminating  on the last  Trading  Day in the period  ending
twenty-four  (24) months  later.  The first  Offering  Period shall begin on the
effective date of the Company's initial public offering of its Common Stock that
is registered  with the Securities and Exchange  Commission and shall end on the
last  Trading Day on or before  October 31,  1996.  The  duration  and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.

                  (l) "Plan" shall mean this Employee Stock Purchase Plan.

                  (m) "Purchase  Price" shall mean an amount equal to 85% of the
Fair Market  Value of a share of Common Stock on the  Enrollment  Date or on the
Exercise Date, whichever is lower.

                  (n)  "Purchase  Period" shall mean the  approximately  six (6)
month  period  commencing  after  one  Exercise  Date and  ending  with the next
Exercise  Date,  except that the first  Purchase  Period of any Offering  Period
shall commence on the  Enrollment  Date and end with the next Exercise Date. The
first Purchase  Period of the first Offering Period shall begin on the effective
date of the  Company's  initial  public  offering  of its  Common  Stock that is
registered with the Securities and Exchange Commission and shall end on the last
Trading Day on or before April 30, 1995.

                  (o) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been  exercised and the
number of shares of Common Stock which have been  authorized  for issuance under
the Plan but not yet placed under option.

                  (p)  "Subsidiary"  shall  mean  a  corporation,   domestic  or
foreign, of which not less than 50% of the voting shares are held by the Company
or a  Subsidiary,  whether or not such  corporation  now exists or is  hereafter
organized or acquired by the Company or a Subsidiary.


                                      -2-
<PAGE>

                  (q)  "Trading  Day" shall mean a day on which  national  stock
exchanges and the National Association of Securities Dealers Automated Quotation
(Nasdaq) System are open for trading.

         3. Eligibility.

                  (a) Any  Employee  (as  defined in Section  2(g)) who shall be
employed by the Company  immediately  preceding a given Enrollment Date shall be
eligible to participate in the Plan; provided, however, that with respect to the
first  Offering  Period,  any Employee who shall be employed by the Company five
(5)  business  days  prior to the first  Enrollment  Date shall be  eligible  to
participate in the Plan.  Notwithstanding the foregoing,  however,  any Employee
shall be eligible to  participate in the Plan who was employed by the Company as
of the effective date of  registration  statement  filed with the Securities and
Exchange  Commission  for the initial  offering of shares of Common Stock of the
Company to the public.

                  (b)   Any   provisions   of   the   Plan   to   the   contrary
notwithstanding,  no Employee  shall be granted an option under the Plan (i) if,
immediately  after the grant,  such  Employee  (or any other  person whose stock
would be  attributed to such  Employee  pursuant to Section  424(d) of the Code)
would own  capital  stock of the  Company  and/or  hold  outstanding  options to
purchase such stock  possessing  five percent (5%) or more of the total combined
voting  power or value of all classes of the capital  stock of the Company or of
any Subsidiary,  or (ii) which permits his or her rights to purchase stock under
all employee stock purchase plans of the Company and its  subsidiaries to accrue
at a rate which exceeds  twenty-five  thousand dollars  ($25,000) worth of stock
(determined  at the fair  market  value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

         4. Offering  Periods.  The Plan shall be  implemented  by  consecutive,
overlapping  Offering  Periods.  Except  for the first  Offering  Period,  a new
Offering  Period shall  commence on the first  Trading Day on or after May 1 and
November 1 each year,  or on such other date as the Board shall  determine,  and
continue  thereafter until terminated in accordance with Section 19 hereof.  The
first Offering Period shall begin on the effective date of the Company's initial
public  offering of its Common Stock that is registered  with the Securities and
Exchange  Commission.  The Board shall have the power to change the  duration of
Offering  Periods  (including  the  commencement  dates thereof) with respect to
future  offerings  without  shareholder  approval if such change is announced at
least  five (5) days  prior to the  scheduled  beginning  of the first  Offering
Period to be affected thereafter.

         5. Participation.

                  (a) An eligible  Employee may become a participant in the Plan
by completing a subscription  agreement  authorizing  payroll  deductions in the
form of Exhibit A to this Plan and filing it with the Company's  payroll  office
five (5) business days prior to the applicable Enrollment Date.

                  (b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering  Period to which such  authorization  is applicable,  unless sooner
terminated by the participant as provided in Section 10 hereof.

         6. Payroll Deductions.

                  (a) At the time a  participant  files his or her  subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering  Period in an amount not exceeding  fifteen percent (15%) of
the  Compensation  which he or she  receives on each pay day during the Offering
Period,  and the aggregate of such payroll deductions during the Offering Period
shall not exceed fifteen percent (15%) of the participant's  Compensation during
said Offering Period.


                                      -3-
<PAGE>


                  (b) All payroll  deductions  made for a  participant  shall be
credited  to his or her  account  under the Plan and will be  withheld  in whole
percentages  only. A participant may not make any additional  payments into such
account.

                  (c) A participant may discontinue his or her  participation in
the Plan as provided in Section 10 hereof.  A participant  may decrease the rate
of his or her payroll  deductions to 0% during the Offering Period by completing
and  filing  with the  Company  a new  subscription  agreement  authorizing  the
reduction in payroll  deduction rate. A participant may resume  participation by
completing  and filing with the Company a new  subscription  agreement  at least
five (5) days prior to the  commencement of the next Offering Period or Purchase
Period, as applicable.  A participant's  subscription  agreement shall remain in
effect for successive  Offering Periods unless terminated as provided in Section
10 hereof.

                  (d) Notwithstanding the foregoing,  to the extent necessary to
comply  with  Section   423(b)(8)  of  the  Code  and  Section  3(b)  hereof,  a
participant's  payroll deductions may be decreased to 0% at such time during any
Purchase Period which is scheduled to end during the current  calendar year (the
"Current  Purchase  Period") that the aggregate of all payroll  deductions which
were previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that  calendar year plus all payroll  deductions  accumulated
with respect to the Current  Purchase Period equal $21,250.  Payroll  deductions
shall  recommence  at the  rate  provided  in  such  participant's  subscription
agreement at the  beginning of the first  Purchase  Period which is scheduled to
end in the following  calendar  year,  unless  terminated by the  participant as
provided in Section 10 hereof.

                  (e) At the time the option is exercised,  in whole or in part,
or at the time some or all of the  Company's  Common Stock issued under the Plan
is disposed of, the participant  must make adequate  provision for the Company's
federal, state, or other tax withholding  obligations,  if any, which arise upon
the exercise of the option or the  disposition of the Common Stock. At any time,
the Company may, but will not be obligated to,  withhold from the  participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax  deductions or benefits  attributable  to sale or early  disposition  of
Common Stock by the Employee.

         7. Grant of Option.  On the  Enrollment  Date of each Offering  Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each  Exercise  Date during such  Offering  Period (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined by dividing such  Employee's  payroll  deductions  accumulated
prior to such Exercise Date and retained in the Participant's  account as of the
Exercise Date by the applicable Purchase Price;  provided that in no event shall
an Employee be permitted  to purchase  during each  Purchase  Period more than a
number of Shares  determined  by dividing  $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such  purchase  shall be subject to the  limitations  set forth in Sections
3(b) and 12 hereof.  Exercise of the option shall occur as provided in Section 8
hereof,  unless the participant has withdrawn pursuant to Section 10 hereof, and
shall expire on the last day of the Offering Period.

         8. Exercise of Option.  Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised  automatically on the Exercise Date, and the maximum number of full
shares  subject  to  option  shall  be  purchased  for such  participant  at the
applicable  Purchase Price with the accumulated payroll deductions in his or her
account.  No  fractional  shares  will  be  purchased;  any  payroll  deductions
accumulated  in a  participant's  account which are not sufficient to purchase a
full share  shall be retained in the  participant's  account for the  subsequent
Purchase  Period or  Offering  Period,  subject  to  earlier  withdrawal  by the
participant  as provided in Section 10 hereof.  Any other  monies


                                      -4-
<PAGE>


left over in a  participant's  account after the Exercise Date shall be returned
to the participant.  During a participant's  lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

         9.  Delivery.  As promptly as  practicable  after each Exercise Date on
which a purchase of shares  occurs,  the Company  shall  arrange the delivery to
each  participant,   as  appropriate,  a  certificate  representing  the  shares
purchased upon exercise of his or her option.

         10. Withdrawal; Termination of Employment.

                  (a) A  participant  may withdraw all but not less than all the
payroll  deductions  credited to his or her account and not yet used to exercise
his or her  option  under the Plan at any time by giving  written  notice to the
Company in the form of Exhibit B to this Plan. All of the participant's  payroll
deductions  credited  to his or her  account  will be  paid to such  participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering  Period will be  automatically  terminated,  and no further payroll
deductions for the purchase of shares will be made for such Offering Period.  If
a participant  withdraws from an Offering  Period,  payroll  deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

                  (b) Upon a participant's ceasing to be an Employee (as defined
in  Section  2(g)  hereof),  for any  reason,  he or she will be  deemed to have
elected to withdraw  from the Plan and the payroll  deductions  credited to such
participant's  account  during the Offering  Period but not yet used to exercise
the option will be returned  to such  participant  or, in the case of his or her
death, to the person or persons  entitled  thereto under Section 14 hereof,  and
such participant's option will be automatically terminated.

         11. Interest.  No interest shall accrue on the payroll  deductions of a
participant in the Plan.

         12. Stock.

                  (a) Subject to adjustment  upon changes in  capitalization  of
the Company as provided  in Section 18 hereof,  the maximum  number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be two million six hundred thousand  (2,600,000) shares,  together with an
annual increase to the number of shares reserved  thereunder to take effect each
year on the date of the Annual Meeting of Shareholders (commencing with the 1999
Annual Meeting of  Shareholders)  equal to the lesser of (i) 1,200,000 shares or
(ii) 2% of the  outstanding  shares of the Company on such date.  If, on a given
Exercise  Date,  the number of shares  with  respect to which  options are to be
exercised  exceeds  the  number of shares  then  available  under the Plan,  the
Company shall make a pro rata allocation of the shares  remaining  available for
purchase  in as  uniform  a  manner  as  shall  be  practicable  and as it shall
determine to be equitable.

                  (b) The  participant  will have no interest or voting right in
shares covered by his option until such option has been exercised.

                  (c) Shares to be  delivered  to a  participant  under the Plan
will  be  registered  in the  name  of the  participant  or in the  name  of the
participant and his or her spouse.

         13. Administration.

                  (a) Administrative Body. The Plan shall be administered by the
Board or a committee of members of the Board  appointed by the Board.  The Board
or its  committee  shall  have full and  exclusive  discretionary  authority  to
construe,  interpret and apply the terms of the Plan,  to determine  eligibility
and to


                                      -5-
<PAGE>


adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination  made by the  Board or its  committee  shall,  to the full  extent
permitted by law, be final and binding upon all parties.

                  (b) Rule 16b-3 Limitations.  Notwithstanding the provisions of
Subsection  (a) of this  Section  13, in the event that Rule  16b-3  promulgated
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), or
any successor  provision ("Rule 16b-3") provides  specific  requirements for the
administrators  of plans of this type,  the Plan shall be only  administered  by
such  a body  and  in  such  a  manner  as  shall  comply  with  the  applicable
requirements  of Rule  16b-3.  Unless  permitted  by Rule 16b-3,  no  discretion
concerning  decisions  regarding  the Plan shall be afforded to any committee or
person that is not "disinterested" as that term is used in Rule 16b-3.

         14. Designation of Beneficiary.

                  (a)  A  participant  may  file  a  written  designation  of  a
beneficiary   who  is  to  receive  any  shares  and  cash,  if  any,  from  the
participant's  account under the Plan in the event of such  participant's  death
subsequent  to an Exercise  Date on which the option is  exercised  but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written  designation of a beneficiary who is to receive any cash from
the  participant's  account  under the Plan in the  event of such  participant's
death  prior to  exercise of the  option.  If a  participant  is married and the
designated  beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

                  (b) Such  designation  of  beneficiary  may be  changed by the
participant  at any time by  written  notice.  In the  event  of the  death of a
participant  and in the absence of a beneficiary  validly  designated  under the
Plan who is living at the time of such  participant's  death,  the Company shall
deliver such shares and/or cash to the executor or  administrator  of the estate
of the participant,  or if no such executor or administrator  has been appointed
(to the knowledge of the Company),  the Company, in its discretion,  may deliver
such  shares  and/or  cash to the  spouse  or to any one or more  dependents  or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         15.   Transferability.   Neither  payroll  deductions   credited  to  a
participant's account nor any rights with regard to the exercise of an option or
to  receive  shares  under the Plan may be  assigned,  transferred,  pledged  or
otherwise  disposed of in any way (other  than by will,  the laws of descent and
distribution or as provided in Section 14 hereof) by the  participant.  Any such
attempt at assignment,  transfer,  pledge or other  disposition shall be without
effect,  except  that the  Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         16.  Use of  Funds.  All  payroll  deductions  received  or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         17.   Reports.   Individual   accounts  will  be  maintained  for  each
participant  in the Plan.  Statements of account will be given to  participating
Employees  at least  annually,  which  statements  will set forth the amounts of
payroll  deductions,  the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         18.   Adjustments   Upon   Changes  in   Capitalization,   Dissolution,
Liquidation, Merger or Asset Sale.

                  (a) Changes in Capitalization.  Subject to any required action
by the shareholders of the Company,  the Reserves as well as the price per share
of Common  Stock  covered by each  option  under the


                                      -6-
<PAGE>


Plan which has not yet been exercised shall be proportionately  adjusted for any
increase or decrease in the number of issued  shares of Common  Stock  resulting
from a  stock  split,  reverse  stock  split,  stock  dividend,  combination  or
reclassification  of the Common Stock,  or any other increase or decrease in the
number of shares of Common Stock effected  without receipt of  consideration  by
the Company; provided, however, that conversion of any convertible securities of
the  Company  shall  not be deemed to have been  "effected  without  receipt  of
consideration".  Such adjustment shall be made by the Board, whose determination
in that  respect  shall be final,  binding and  conclusive.  Except as expressly
provided herein,  no issuance by the Company of shares of stock of any class, or
securities  convertible into shares of stock of any class,  shall affect, and no
adjustment by reason  thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution  or  liquidation  of the  Company,  the  Offering  Periods  will end
immediately prior to the consummation of such proposed action,  unless otherwise
provided by the Board,  and all options granted  thereunder will be exercised at
such time. Such exercise shall take place according to the provisions of Section
8 hereof.

                  (c) Merger or Asset Sale.  In the event of a proposed  sale of
all or  substantially  all of the  assets of the  Company,  or the merger of the
Company  with or into another  corporation,  each option under the Plan shall be
assumed  or  an  equivalent  option  shall  be  substituted  by  such  successor
corporation or a parent or subsidiary of such successor corporation,  unless the
Board  determines,  in the exercise of its sole  discretion  and in lieu of such
assumption or substitution,  to shorten the Offering Periods then in progress by
setting a new Exercise Date (the "New Exercise Date"). If the Board shortens the
Offering  Periods then in progress in lieu of assumption or  substitution in the
event of a merger or sale of assets,  the Board shall notify each participant in
writing,  at least ten (10) business days prior to the New Exercise  Date,  that
the Exercise  Date for his option has been changed to the New Exercise  Date and
that his option will be exercised automatically on the New Exercise Date, unless
prior to such date he has  withdrawn  from the  Offering  Period as  provided in
Section 10 hereof.  For purposes of this paragraph,  an option granted under the
Plan shall be deemed to be assumed if,  following  the sale of assets or merger,
the option confers the right to purchase, for each share of option stock subject
to  the  option  immediately  prior  to  the  sale  of  assets  or  merger,  the
consideration  (whether stock, cash or other securities or property) received in
the sale of assets or merger by holders of Common Stock for each share of Common
Stock held on the effective  date of the  transaction  (and if such holders were
offered  a choice  of  consideration,  the type of  consideration  chosen by the
holders of a majority  of the  outstanding  shares of Common  Stock);  provided,
however, that if such consideration received in the sale of assets or merger was
not solely common stock of the successor  corporation  or its parent (as defined
in Section 424(e) of the Code), the Board may, with the consent of the successor
corporation,  provide for the  consideration to be received upon exercise of the
option to be solely  common  stock of the  successor  corporation  or its parent
equal in fair market value to the per share consideration received by holders of
Common Stock and the sale of assets or merger.

         19. Amendment or Termination.

                  (a) The Board of  Directors of the Company may at any time and
for any reason  terminate  or amend the Plan.  Except as  provided in Section 18
hereof, no such termination can affect options previously granted, provided that
an Offering  Period may be  terminated by the Board of Directors on any Exercise
Date if the Board  determines  that the  termination  of the Plan is in the best
interests of the Company and its shareholders.  Except as provided in Section 18
hereof, no amendment may make any change in any option theretofore granted which
adversely  affects the rights of any  participant.  To the extent  necessary  to
comply with Rule 16b-3 or under Section 423 of the Code (or any  successor  rule
or provision  or any other  applicable  law or  regulation),  the Company  shall
obtain shareholder approval in such a manner and to such a degree as required.


                                      -7-
<PAGE>


                  (b) Without  shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely  affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period,  establish  the  exchange  ratio  applicable  to amounts  withheld  in a
currency other than U.S.  dollars,  permit payroll  withholding in excess of the
amount  designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections,  establish
reasonable  waiting and  adjustment  periods  and/or  accounting  and  crediting
procedures  to ensure that amounts  applied  toward the purchase of Common Stock
for  each  participant  properly  correspond  with  amounts  withheld  from  the
participant's  Compensation,  and establish such other limitations or procedures
as the Board (or its  committee)  determines  in its sole  discretion  advisable
which are consistent with the Plan.

         20. Notices.  All notices or other  communications  by a participant to
the Company  under or in  connection  with the Plan shall be deemed to have been
duly given when  received in the form  specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option  unless the  exercise of such option and the  issuance  and
delivery of such  shares  pursuant  thereto  shall  comply  with all  applicable
provisions  of law,  domestic or foreign,  including,  without  limitation,  the
Securities Act of 1933, as amended (the "1933 Act"), the Exchange Act, the rules
and  regulations  promulgated  thereunder,  and the  requirements  of any  stock
exchange upon which the shares may then be listed,  and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

                  As a condition to the  exercise of an option,  the Company may
require the person  exercising  such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without  any  present  intention  to sell or  distribute  such shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the  aforementioned  applicable  provisions  of law.

         22. Term of Plan.  The Plan shall become  effective upon the earlier to
occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders of the Company.  It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.

         23.  Automatic  Transfer to Low Price  Offering  Period.  To the extent
permitted  by Rule 16b-3 of the  Exchange  Act, if the Fair Market  Value of the
Common Stock on any Exercise  Date in an Offering  Period is lower than the Fair
Market Value of the Common Stock on the Enrollment Date of such Offering Period,
then all participants in such Offering Period shall be  automatically  withdrawn
from such Offering Period immediately after the exercise of their option on such
Exercise  Date  and  automatically  re-enrolled  in  the  immediately  following
Offering Period as of the first day thereof.


                                      -8-
<PAGE>


                                    EXHIBIT A

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

                                                               Enrollment Date:

________      Original Application
________      Change in Payroll Deduction Rate
________      Change of Beneficiary(ies)

         1.  ________________________   hereby  elects  to  participate  in  the
Pinnacle  Systems,  Inc. 1994 Employee Stock Purchase Plan (the "Employee  Stock
Purchase Plan") and subscribes to purchase shares of the Company's  Common Stock
in accordance with this  Subscription  Agreement and the Employee Stock Purchase
Plan.

         2. I hereby  authorize  payroll  deductions  from each  paycheck in the
amount of ____% of my  Compensation  on each payday  (1-15%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)

         3. I understand that said payroll  deductions  shall be accumulated for
the  purchase  of  shares  of  Common  Stock at the  applicable  Purchase  Price
determined in accordance  with the Employee  Stock  Purchase  Plan. I understand
that if I do not  withdraw  from an Offering  Period,  any  accumulated  payroll
deductions will be used to automatically exercise my option.

         4. I have received a copy of the complete "Pinnacle Systems,  Inc. 1994
Employee  Stock  Purchase  Plan."  I  understand  that my  participation  in the
Employee  Stock  Purchase  Plan is in all  respects  subject to the terms of the
Plan.  I  understand   that  my  ability  to  exercise  the  option  under  this
Subscription  Agreement  is subject to  obtaining  shareholder  approval  of the
Employee Stock Purchase Plan.

         5. Shares  purchased  for me under the  Employee  Stock  Purchase  Plan
should be issued in the name(s) of (Employee or Employee and
spouse only):  _____________________________.

         6. I understand that if I dispose of any shares received by me pursuant
to the Plan within two (2) years after the Enrollment Date (the first day of the
Offering  Period during which I purchased such shares) or one (1) year after the
Exercise  Date,  I will be treated  for  federal  income tax  purposes as having
received  ordinary income at the time of such  disposition in an amount equal to
the excess of the fair  market  value of the shares at the time such shares were
purchased  over the price which I paid for the shares.  I hereby agree to notify
the Company in writing within thirty (30) days after the date of any disposition
of my shares and I will make adequate provision for Federal,  state or other tax
withholding obligations,  if any, which arise upon the disposition of the Common
Stock.  The  Company  may,  but  will  not be  obligated  to,  withhold  from my
compensation the amount necessary to meet any applicable  withholding obligation
including  any  withholding  necessary to make  available to the Company any tax
deductions or benefits


<PAGE>


attributable to sale or early disposition of Common Stock by me. If I dispose of
such  shares at any time  after the  expiration  of the two (2) year and one (1)
year holding periods, I understand that I will be treated for federal income tax
purposes as having  received  income only at the time of such  disposition,  and
that such  income  will be taxed as  ordinary  income  only to the  extent of an
amount  equal to the  lesser of (1) the excess of the fair  market  value of the
shares at the time of such  disposition over the purchase price which I paid for
the shares,  or (2) 15% of the fair market  value of the shares on the first day
of the Offering  Period.  The remainder of the gain, if any,  recognized on such
disposition will be taxed as capital gain.

         7. I hereby agree not to sell or otherwise transfer any shares or other
securities  of the  Company  during  the one  hundred  eighty  (180) day  period
following the effective  date of a  registration  statement of the Company filed
under the  Securities  Act of 1933,  as  amended  (the  "1933  Act");  provided,
however,  that such  restriction  shall only apply to the first two registration
statements of the Company to become  effective  under the 1933 Act which include
securities to be sold on behalf of the Company to the public in an  underwritten
public  offering under the 1933 Act. I hereby  acknowledge  that the Company may
impose  stop-transfer  instructions  with respect to  securities  subject to the
foregoing  restrictions  until  the end of such one  hundred  eighty  (180)  day
period.

         8. I  hereby  agree to be bound  by the  terms  of the  Employee  Stock
Purchase Plan. The  effectiveness  of this  Subscription  Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.

         9. In the event of my death,  I hereby  designate  the  following as my
beneficiary(ies)  to receive all  payments  and shares due me under the Employee
Stock Purchase Plan:


NAME:  (Please print)
                     -----------------------------------------------------------
                         (First)                   (Middle)          (Last)

Relationship

                                        (Address)

Employee's Social
Security Number:
                                        ----------------------------------------

Employee's Address:
                                        ----------------------------------------



I UNDERSTAND THAT THIS SUBSCRIPTION  AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
       -----------------------------        ------------------------------------
                                            Signature of Employee

                                            Spouse's Signature (If beneficiary
                                            other than spouse)


                                      -2-
<PAGE>

                                    EXHIBIT B

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         The  undersigned  participant  in the  Offering  Period of the Pinnacle
Systems,  Inc. 1994 Employee  Stock  Purchase Plan which began on  ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the  undersigned  as  promptly  as  practicable  all the  payroll  deductions
credited  to his or her  account  with  respect  to such  Offering  Period.  The
undersigned  understands  and agrees  that his or her  option for such  Offering
Period will be automatically  terminated.  The undersigned  understands  further
that no further  payroll  deductions  will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in  succeeding  Offering  Periods  only  by  delivering  to  the  Company  a new
Subscription Agreement.



                                       Name and Address of Participant:


                                       -----------------------------------------



                                       -----------------------------------------


                                       Signature:





         Date:
              ------------------------------------------------
[{"type": "S-8", "sequence": "1", "filename": "0001.txt", "description": "FORM S-8", "secsgml_size_bytes": 50102}]
{"company-data": {"conformed-name": "PINNACLE SYSTEMS INC", "cik": "0000774695", "assigned-sic": "3861", "irs-number": "943003809", "state-of-incorporation": "CA", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-51110", "film-number": "782349"}, "business-address": {"street1": "280 N BERNARDO AVE", "city": "MOUNTAIN VIEW", "state": "CA", "zip": "94043", "phone": "6502371600"}, "mail-address": {"street1": "280 N BERNARDO AVE", "city": "MOUNTAIN VIEW", "state": "CA", "zip": "94043"}}
As filed with the Securities and Exchange Commission on December 1, 2000
                                                           Registration No. 333-
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           The Securities Act of 1933
                                 --------------

                             PINNACLE SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)
                                 --------------

        California                                      94-3003809
 (State of incorporation)                (I.R.S. Employer Identification Number)

                            280 North Bernardo Avenue
                         Mountain View, California 94043
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)
                                 --------------
                        1994 EMPLOYEE STOCK PURCHASE PLAN
                             1996 STOCK OPTION PLAN
                       1996 SUPPLEMENTAL STOCK OPTION PLAN
                            (Full title of the plan)
                                 --------------
                                 MARK L. SANDERS
                      President and Chief Executive Officer
                             PINNACLE SYSTEMS, INC.
                            280 North Bernardo Avenue
                         Mountain View, California 94043
                                 (650) 526-1600
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                                 --------------
                                   Copies to:
                             CHRIS F. FENNELL, ESQ.
                        Wilson Sonsini Goodrich & Rosati
                            Professional Corporation
                               650 Page Mill Road
                               Palo Alto, CA 94304
                                 (650) 493-9300
                                 --------------

                                                CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed               Proposed
                                                                           Maximum                Maximum
          Title of Each Class                      Amount                 Offering               Aggregate            Amount of
            of Securities to                       to be                    Price                Offering            Registration
             be Registered                       Registered               Per Share                Price                 Fee
------------------------------------------------------------------------------------------------------------------------------------
Common Stock, no par value,  and related
Preferred Share Purchase Rights.......         8,566,372 shares          $ 9.625               $ 82,451,330.50        $ 21,767.15
====================================================================================================================================
(1)   Calculated  in  accordance  with Rule  457(c)  solely for the purpose of
        computing the amount of the  registration  fee based upon the average of
        the high and low prices for the Common  Stock as  reported on the Nasdaq
        National Market on November 27, 2000.
The contents of the Registrant's Form S-8 Registration Statement (Registration
  No.  33-89706) as filed with the  Commission  on February  23, 1995,  Form S-8
  Registration  Statement   (Registration  No.  333-02816)  as  filed  with  the
  Commission on March 27, 1996, Form S-8  Registration  Statement  (Registration
  No.  333-16999) as filed with the  Commission  on November 27, 1996,  Form S-8
  Registration  Statement   (Registration  No.  333-25697)  as  filed  with  the
  Commission on April 23, 1997, Form S-8  Registration  Statement  (Registration
  No.  333-34759)  as filed with the  Commission  on August 29,  1997,  Form S-8
  Registration  Statement   (Registration  No.  333-74071)  as  filed  with  the
  Commission on March 8, 1999, Form S-8 Registration Statement (Registration No.
  333-75935)  as  filed  with  the  Commission  on  April  8,  1999,   Form  S-8
  Registration  Statement   (Registration  No.  333-85895)  as  filed  with  the
  Commission   on  August  25,   1999  and  Form  S-8   Registration   Statement
  (Registration No. 333-30492) as filed with the Commission on February 16, 2000
  are incorporated herein by reference.
  ==============================================================================
PART II: INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 8          Exhibits

Exhibit

Number                                 Documents
-----------     ------------------------------------------------------------
4.1             1994 Employee Stock Purchase Plan, as amended

4.2             1996 Stock Option Plan, as amended

4.3             1996 Supplemental Stock Option Plan, as amended

5.1             Opinion of counsel as to legality of securities being registered

23.1            Consent of Counsel (contained in Exhibit 5.1)

23.2            Consent of KPMG LLP, Independent Auditors

24.1            Power of Attorney (see page II 2)
SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
Registrant,  Pinnacle Systems, Inc., certifies that it has reasonable grounds to
believe  that it meets all of the  requirements  for  filing on Form S-8 and has
duly  caused  this  Registration  Statement  to be signed  on its  behalf by the
undersigned,  thereunto duly authorized,  in the city of Mountain View, State of
California, on this 27th day of November, 2000.

                                      PINNACLE SYSTEMS, INC.

                                      By:  /s/ Mark L. SANDERS
                                          --------------------------------------
                                           Mark L. Sanders
                                           President and Chief Executive Officer

                                POWER OF ATTORNEY

         KNOW ALL  PERSONS  BY THESE  PRESENTS,  that  each  such  person  whose
signature appears below constitutes and appoints jointly and severally,  Mark L.
Sanders  and Arthur D.  Chadwick  his  attorney-in-fact,  each with the power of
substitution,  for him in any and all capacities, to sign any amendments to this
Registration Statement on Form S-8 (including post-effective amendments), and to
file the same,  with all exhibits  thereto,  and other  documents in  connection
therewith,  with the Securities and Exchange  Commission,  hereby  ratifying and
confirming  all  that  each  of said  attorneys-in-fact,  or his  substitute  or
substitutes, may do or cause to be done by virtue hereof.
Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:
Signature                                         Title                                Date
-----------------------------------               -------------------------------------------      -------------------
/s/ MARK L. SANDERS                 President, Chief Executive Officer and
-----------------------------------               Director (Principal Executive Officer)           November 27, 2000
                 (Mark L. Sanders)

            /s/ ARTHUR D. CHADWICK                Vice President, Finance and Administration
-----------------------------------               and Chief Financial Officer (Principal           November 27, 2000
              (Arthur D. Chadwick)                Financial and Accounting Officer)

                /s/ AJAY CHOPRA                   Chairman of the Board and Vice President,        November 27, 2000
----------------------------------                Desktop Products
                 (Ajay Chopra)

             /s/ GLENN E. PENISTEN                Director                                         November 27, 2000
----------------------------------
               Glenn E. Penisten)

            /s/ CHARLES J. VAUGHAN                Director                                         November 27, 2000
----------------------------------
              Charles J. Vaughan)

                /s/ JOHN LEWIS                    Director                                         November 27, 2000
---------------------------------
                  (John Lewis)
-2-
SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                          ---------------------------

                                    EXHIBITS

                          ---------------------------

                       Registration Statement on Form S-8

                             Pinnacle Systems, Inc.

                                December 1, 2000
INDEX TO EXHIBITS

Exhibit

Number                        Documents
----------      ------------------------------------------------------------

4.1             1994 Employee Stock Purchase Plan, as amended

4.2             1996 Stock Option Plan, as amended

4.3             1996 Supplemental Stock Option Plan, as amended

5.1             Opinion of counsel as to legality of securities being registered

23.1            Consent of Counsel (contained in Exhibit 5.1)

23.2            Consent of KPMG LLP, Independent Auditors

24.1            Power of Attorney (see page II 2)
Exhibit 4.1

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN
                           (as amended October, 2000)

         The following  constitute  the  provisions  of the 1994 Employee  Stock
Purchase Plan of Pinnacle Systems, Inc.

         1.  Purpose.  The  purpose of the Plan is to provide  employees  of the
Company and its Designated  Subsidiaries  with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an  "Employee  Stock  Purchase  Plan"
under  Section  423 of the  Internal  Revenue  Code of  1986,  as  amended.  The
provisions  of the Plan,  accordingly,  shall be  construed  so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

         2.  Definitions.

                  (a) "Board" shall mean the Board of Directors of the Company.

                  (b) "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended.

                  (c) "Common Stock" shall mean the Common Stock of the Company.

                  (d)  "Company"  shall  mean  Pinnacle  Systems,  Inc.  and any
Designated Subsidiary of the Company.

                  (e)  "Compensation"  shall mean all base  straight  time gross
earnings, excluding commissions,  payments for overtime, shift premium, variable
compensation, incentive payments, bonuses, and other cash compensation.

                  (f)  "Designated  Subsidiaries"  shall  mean the  Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

                  (g) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes whose  customary  employment with the Company is at
least  twenty (20) hours per week and more than five (5) months in any  calendar
year. For purposes of the Plan, the employment  relationship shall be treated as
continuing  intact  while  the  individual  is on sick  leave or other  leave of
absence  approved by the Company.  Where the period of leave exceeds ninety (90)
days and the  individual's  right to  reemployment  is not guaranteed  either by
statute  or by  contract,  the  employment  relationship  will be deemed to have
terminated on the 91st day of such leave.

                  (h)  "Enrollment  Date"  shall  mean  the  first  day of  each
Offering Period.

                  (i)  "Exercise  Date" shall mean the last day of each Purchase
Period.

                  (j) "Fair Market Value" shall mean, as of any date,  the value
of Common Stock determined as follows:
(i) If the Common Stock is listed on any  established
stock exchange or a national  market system,  including  without  limitation the
Nasdaq National Market of the National  Association of Securities Dealers,  Inc.
Automated  Quotation  ("Nasdaq")  System,  its Fair  Market  Value  shall be the
closing  sale price for the  Common  Stock (or the mean of the  closing  bid and
asked  prices,  if no sales were  reported),  as quoted on such exchange (or the
exchange  with the greatest  volume of trading in Common Stock) or system on the
date of such determination, as reported in The Wall Street Journal or such other
source as the Board deems  reliable,  or;

                           (ii) If the  Common  Stock is  quoted  on the  Nasdaq
System (but not on the  National  Market  thereof) or is  regularly  quoted by a
recognized  securities  dealer but  selling  prices are not  reported,  its Fair
Market  Value  shall be the mean of the  closing  bid and asked  prices  for the
Common Stock on the date of such  determination,  as reported in The Wall Street
Journal or such  other  source as the Board  deems  reliable,  or;

                           (iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

                  For purposes of the  Enrollment  Date under the first Offering
Period under the Plan,  the Fair Market Value shall be the initial  price to the
public as set forth in the final  Prospectus  included  within the  Registration
Statement on Form S-1 filed with the Securities and Exchange  Commission for the
initial public offering of the Company's Common Stock.

                  (k) "Offering  Period" shall mean the period of  approximately
twenty-four  (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after May 1 and November
1 of each year and  terminating  on the last  Trading  Day in the period  ending
twenty-four  (24) months  later.  The first  Offering  Period shall begin on the
effective date of the Company's initial public offering of its Common Stock that
is registered  with the Securities and Exchange  Commission and shall end on the
last  Trading Day on or before  October 31,  1996.  The  duration  and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.

                  (l) "Plan" shall mean this Employee Stock Purchase Plan.

                  (m) "Purchase  Price" shall mean an amount equal to 85% of the
Fair Market  Value of a share of Common Stock on the  Enrollment  Date or on the
Exercise Date, whichever is lower.

                  (n)  "Purchase  Period" shall mean the  approximately  six (6)
month  period  commencing  after  one  Exercise  Date and  ending  with the next
Exercise  Date,  except that the first  Purchase  Period of any Offering  Period
shall commence on the  Enrollment  Date and end with the next Exercise Date. The
first Purchase  Period of the first Offering Period shall begin on the effective
date of the  Company's  initial  public  offering  of its  Common  Stock that is
registered with the Securities and Exchange Commission and shall end on the last
Trading Day on or before April 30, 1995.

                  (o) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been  exercised and the
number of shares of Common Stock which have been  authorized  for issuance under
the Plan but not yet placed under option.

                  (p)  "Subsidiary"  shall  mean  a  corporation,   domestic  or
foreign, of which not less than 50% of the voting shares are held by the Company
or a  Subsidiary,  whether or not such  corporation  now exists or is  hereafter
organized or acquired by the Company or a Subsidiary.

                                      -2-
(q)  "Trading  Day" shall mean a day on which  national  stock
exchanges and the National Association of Securities Dealers Automated Quotation
(Nasdaq) System are open for trading.

         3. Eligibility.

                  (a) Any  Employee  (as  defined in Section  2(g)) who shall be
employed by the Company  immediately  preceding a given Enrollment Date shall be
eligible to participate in the Plan; provided, however, that with respect to the
first  Offering  Period,  any Employee who shall be employed by the Company five
(5)  business  days  prior to the first  Enrollment  Date shall be  eligible  to
participate in the Plan.  Notwithstanding the foregoing,  however,  any Employee
shall be eligible to  participate in the Plan who was employed by the Company as
of the effective date of  registration  statement  filed with the Securities and
Exchange  Commission  for the initial  offering of shares of Common Stock of the
Company to the public.

                  (b)   Any   provisions   of   the   Plan   to   the   contrary
notwithstanding,  no Employee  shall be granted an option under the Plan (i) if,
immediately  after the grant,  such  Employee  (or any other  person whose stock
would be  attributed to such  Employee  pursuant to Section  424(d) of the Code)
would own  capital  stock of the  Company  and/or  hold  outstanding  options to
purchase such stock  possessing  five percent (5%) or more of the total combined
voting  power or value of all classes of the capital  stock of the Company or of
any Subsidiary,  or (ii) which permits his or her rights to purchase stock under
all employee stock purchase plans of the Company and its  subsidiaries to accrue
at a rate which exceeds  twenty-five  thousand dollars  ($25,000) worth of stock
(determined  at the fair  market  value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

         4. Offering  Periods.  The Plan shall be  implemented  by  consecutive,
overlapping  Offering  Periods.  Except  for the first  Offering  Period,  a new
Offering  Period shall  commence on the first  Trading Day on or after May 1 and
November 1 each year,  or on such other date as the Board shall  determine,  and
continue  thereafter until terminated in accordance with Section 19 hereof.  The
first Offering Period shall begin on the effective date of the Company's initial
public  offering of its Common Stock that is registered  with the Securities and
Exchange  Commission.  The Board shall have the power to change the  duration of
Offering  Periods  (including  the  commencement  dates thereof) with respect to
future  offerings  without  shareholder  approval if such change is announced at
least  five (5) days  prior to the  scheduled  beginning  of the first  Offering
Period to be affected thereafter.

         5. Participation.

                  (a) An eligible  Employee may become a participant in the Plan
by completing a subscription  agreement  authorizing  payroll  deductions in the
form of Exhibit A to this Plan and filing it with the Company's  payroll  office
five (5) business days prior to the applicable Enrollment Date.

                  (b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering  Period to which such  authorization  is applicable,  unless sooner
terminated by the participant as provided in Section 10 hereof.

         6. Payroll Deductions.

                  (a) At the time a  participant  files his or her  subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering  Period in an amount not exceeding  fifteen percent (15%) of
the  Compensation  which he or she  receives on each pay day during the Offering
Period,  and the aggregate of such payroll deductions during the Offering Period
shall not exceed fifteen percent (15%) of the participant's  Compensation during
said Offering Period.

                                      -3-
(b) All payroll  deductions  made for a  participant  shall be
credited  to his or her  account  under the Plan and will be  withheld  in whole
percentages  only. A participant may not make any additional  payments into such
account.

                  (c) A participant may discontinue his or her  participation in
the Plan as provided in Section 10 hereof.  A participant  may decrease the rate
of his or her payroll  deductions to 0% during the Offering Period by completing
and  filing  with the  Company  a new  subscription  agreement  authorizing  the
reduction in payroll  deduction rate. A participant may resume  participation by
completing  and filing with the Company a new  subscription  agreement  at least
five (5) days prior to the  commencement of the next Offering Period or Purchase
Period, as applicable.  A participant's  subscription  agreement shall remain in
effect for successive  Offering Periods unless terminated as provided in Section
10 hereof.

                  (d) Notwithstanding the foregoing,  to the extent necessary to
comply  with  Section   423(b)(8)  of  the  Code  and  Section  3(b)  hereof,  a
participant's  payroll deductions may be decreased to 0% at such time during any
Purchase Period which is scheduled to end during the current  calendar year (the
"Current  Purchase  Period") that the aggregate of all payroll  deductions which
were previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that  calendar year plus all payroll  deductions  accumulated
with respect to the Current  Purchase Period equal $21,250.  Payroll  deductions
shall  recommence  at the  rate  provided  in  such  participant's  subscription
agreement at the  beginning of the first  Purchase  Period which is scheduled to
end in the following  calendar  year,  unless  terminated by the  participant as
provided in Section 10 hereof.

                  (e) At the time the option is exercised,  in whole or in part,
or at the time some or all of the  Company's  Common Stock issued under the Plan
is disposed of, the participant  must make adequate  provision for the Company's
federal, state, or other tax withholding  obligations,  if any, which arise upon
the exercise of the option or the  disposition of the Common Stock. At any time,
the Company may, but will not be obligated to,  withhold from the  participant's
compensation the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to the Company
any tax  deductions or benefits  attributable  to sale or early  disposition  of
Common Stock by the Employee.

         7. Grant of Option.  On the  Enrollment  Date of each Offering  Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on each  Exercise  Date during such  Offering  Period (at the
applicable  Purchase  Price) up to a number of  shares of the  Company's  Common
Stock  determined by dividing such  Employee's  payroll  deductions  accumulated
prior to such Exercise Date and retained in the Participant's  account as of the
Exercise Date by the applicable Purchase Price;  provided that in no event shall
an Employee be permitted  to purchase  during each  Purchase  Period more than a
number of Shares  determined  by dividing  $12,500 by the Fair Market Value of a
share of the Company's Common Stock on the Enrollment Date, and provided further
that such  purchase  shall be subject to the  limitations  set forth in Sections
3(b) and 12 hereof.  Exercise of the option shall occur as provided in Section 8
hereof,  unless the participant has withdrawn pursuant to Section 10 hereof, and
shall expire on the last day of the Offering Period.

         8. Exercise of Option.  Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised  automatically on the Exercise Date, and the maximum number of full
shares  subject  to  option  shall  be  purchased  for such  participant  at the
applicable  Purchase Price with the accumulated payroll deductions in his or her
account.  No  fractional  shares  will  be  purchased;  any  payroll  deductions
accumulated  in a  participant's  account which are not sufficient to purchase a
full share  shall be retained in the  participant's  account for the  subsequent
Purchase  Period or  Offering  Period,  subject  to  earlier  withdrawal  by the
participant  as provided in Section 10 hereof.  Any other  monies

                                      -4-
left over in a  participant's  account after the Exercise Date shall be returned
to the participant.  During a participant's  lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

         9.  Delivery.  As promptly as  practicable  after each Exercise Date on
which a purchase of shares  occurs,  the Company  shall  arrange the delivery to
each  participant,   as  appropriate,  a  certificate  representing  the  shares
purchased upon exercise of his or her option.

         10. Withdrawal; Termination of Employment.

                  (a) A  participant  may withdraw all but not less than all the
payroll  deductions  credited to his or her account and not yet used to exercise
his or her  option  under the Plan at any time by giving  written  notice to the
Company in the form of Exhibit B to this Plan. All of the participant's  payroll
deductions  credited  to his or her  account  will be  paid to such  participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering  Period will be  automatically  terminated,  and no further payroll
deductions for the purchase of shares will be made for such Offering Period.  If
a participant  withdraws from an Offering  Period,  payroll  deductions will not
resume at the beginning of the succeeding Offering Period unless the participant
delivers to the Company a new subscription agreement.

                  (b) Upon a participant's ceasing to be an Employee (as defined
in  Section  2(g)  hereof),  for any  reason,  he or she will be  deemed to have
elected to withdraw  from the Plan and the payroll  deductions  credited to such
participant's  account  during the Offering  Period but not yet used to exercise
the option will be returned  to such  participant  or, in the case of his or her
death, to the person or persons  entitled  thereto under Section 14 hereof,  and
such participant's option will be automatically terminated.

         11. Interest.  No interest shall accrue on the payroll  deductions of a
participant in the Plan.

         12. Stock.

                  (a) Subject to adjustment  upon changes in  capitalization  of
the Company as provided  in Section 18 hereof,  the maximum  number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be two million six hundred thousand  (2,600,000) shares,  together with an
annual increase to the number of shares reserved  thereunder to take effect each
year on the date of the Annual Meeting of Shareholders (commencing with the 1999
Annual Meeting of  Shareholders)  equal to the lesser of (i) 1,200,000 shares or
(ii) 2% of the  outstanding  shares of the Company on such date.  If, on a given
Exercise  Date,  the number of shares  with  respect to which  options are to be
exercised  exceeds  the  number of shares  then  available  under the Plan,  the
Company shall make a pro rata allocation of the shares  remaining  available for
purchase  in as  uniform  a  manner  as  shall  be  practicable  and as it shall
determine to be equitable.

                  (b) The  participant  will have no interest or voting right in
shares covered by his option until such option has been exercised.

                  (c) Shares to be  delivered  to a  participant  under the Plan
will  be  registered  in the  name  of the  participant  or in the  name  of the
participant and his or her spouse.

         13. Administration.

                  (a) Administrative Body. The Plan shall be administered by the
Board or a committee of members of the Board  appointed by the Board.  The Board
or its  committee  shall  have full and  exclusive  discretionary  authority  to
construe,  interpret and apply the terms of the Plan,  to determine  eligibility
and to

                                      -5-
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination  made by the  Board or its  committee  shall,  to the full  extent
permitted by law, be final and binding upon all parties.

                  (b) Rule 16b-3 Limitations.  Notwithstanding the provisions of
Subsection  (a) of this  Section  13, in the event that Rule  16b-3  promulgated
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), or
any successor  provision ("Rule 16b-3") provides  specific  requirements for the
administrators  of plans of this type,  the Plan shall be only  administered  by
such  a body  and  in  such  a  manner  as  shall  comply  with  the  applicable
requirements  of Rule  16b-3.  Unless  permitted  by Rule 16b-3,  no  discretion
concerning  decisions  regarding  the Plan shall be afforded to any committee or
person that is not "disinterested" as that term is used in Rule 16b-3.

         14. Designation of Beneficiary.

                  (a)  A  participant  may  file  a  written  designation  of  a
beneficiary   who  is  to  receive  any  shares  and  cash,  if  any,  from  the
participant's  account under the Plan in the event of such  participant's  death
subsequent  to an Exercise  Date on which the option is  exercised  but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written  designation of a beneficiary who is to receive any cash from
the  participant's  account  under the Plan in the  event of such  participant's
death  prior to  exercise of the  option.  If a  participant  is married and the
designated  beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

                  (b) Such  designation  of  beneficiary  may be  changed by the
participant  at any time by  written  notice.  In the  event  of the  death of a
participant  and in the absence of a beneficiary  validly  designated  under the
Plan who is living at the time of such  participant's  death,  the Company shall
deliver such shares and/or cash to the executor or  administrator  of the estate
of the participant,  or if no such executor or administrator  has been appointed
(to the knowledge of the Company),  the Company, in its discretion,  may deliver
such  shares  and/or  cash to the  spouse  or to any one or more  dependents  or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

         15.   Transferability.   Neither  payroll  deductions   credited  to  a
participant's account nor any rights with regard to the exercise of an option or
to  receive  shares  under the Plan may be  assigned,  transferred,  pledged  or
otherwise  disposed of in any way (other  than by will,  the laws of descent and
distribution or as provided in Section 14 hereof) by the  participant.  Any such
attempt at assignment,  transfer,  pledge or other  disposition shall be without
effect,  except  that the  Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         16.  Use of  Funds.  All  payroll  deductions  received  or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         17.   Reports.   Individual   accounts  will  be  maintained  for  each
participant  in the Plan.  Statements of account will be given to  participating
Employees  at least  annually,  which  statements  will set forth the amounts of
payroll  deductions,  the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         18.   Adjustments   Upon   Changes  in   Capitalization,   Dissolution,
Liquidation, Merger or Asset Sale.

                  (a) Changes in Capitalization.  Subject to any required action
by the shareholders of the Company,  the Reserves as well as the price per share
of Common  Stock  covered by each  option  under the

                                      -6-
Plan which has not yet been exercised shall be proportionately  adjusted for any
increase or decrease in the number of issued  shares of Common  Stock  resulting
from a  stock  split,  reverse  stock  split,  stock  dividend,  combination  or
reclassification  of the Common Stock,  or any other increase or decrease in the
number of shares of Common Stock effected  without receipt of  consideration  by
the Company; provided, however, that conversion of any convertible securities of
the  Company  shall  not be deemed to have been  "effected  without  receipt  of
consideration".  Such adjustment shall be made by the Board, whose determination
in that  respect  shall be final,  binding and  conclusive.  Except as expressly
provided herein,  no issuance by the Company of shares of stock of any class, or
securities  convertible into shares of stock of any class,  shall affect, and no
adjustment by reason  thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

                  (b) Dissolution or  Liquidation.  In the event of the proposed
dissolution  or  liquidation  of the  Company,  the  Offering  Periods  will end
immediately prior to the consummation of such proposed action,  unless otherwise
provided by the Board,  and all options granted  thereunder will be exercised at
such time. Such exercise shall take place according to the provisions of Section
8 hereof.

                  (c) Merger or Asset Sale.  In the event of a proposed  sale of
all or  substantially  all of the  assets of the  Company,  or the merger of the
Company  with or into another  corporation,  each option under the Plan shall be
assumed  or  an  equivalent  option  shall  be  substituted  by  such  successor
corporation or a parent or subsidiary of such successor corporation,  unless the
Board  determines,  in the exercise of its sole  discretion  and in lieu of such
assumption or substitution,  to shorten the Offering Periods then in progress by
setting a new Exercise Date (the "New Exercise Date"). If the Board shortens the
Offering  Periods then in progress in lieu of assumption or  substitution in the
event of a merger or sale of assets,  the Board shall notify each participant in
writing,  at least ten (10) business days prior to the New Exercise  Date,  that
the Exercise  Date for his option has been changed to the New Exercise  Date and
that his option will be exercised automatically on the New Exercise Date, unless
prior to such date he has  withdrawn  from the  Offering  Period as  provided in
Section 10 hereof.  For purposes of this paragraph,  an option granted under the
Plan shall be deemed to be assumed if,  following  the sale of assets or merger,
the option confers the right to purchase, for each share of option stock subject
to  the  option  immediately  prior  to  the  sale  of  assets  or  merger,  the
consideration  (whether stock, cash or other securities or property) received in
the sale of assets or merger by holders of Common Stock for each share of Common
Stock held on the effective  date of the  transaction  (and if such holders were
offered  a choice  of  consideration,  the type of  consideration  chosen by the
holders of a majority  of the  outstanding  shares of Common  Stock);  provided,
however, that if such consideration received in the sale of assets or merger was
not solely common stock of the successor  corporation  or its parent (as defined
in Section 424(e) of the Code), the Board may, with the consent of the successor
corporation,  provide for the  consideration to be received upon exercise of the
option to be solely  common  stock of the  successor  corporation  or its parent
equal in fair market value to the per share consideration received by holders of
Common Stock and the sale of assets or merger.

         19. Amendment or Termination.

                  (a) The Board of  Directors of the Company may at any time and
for any reason  terminate  or amend the Plan.  Except as  provided in Section 18
hereof, no such termination can affect options previously granted, provided that
an Offering  Period may be  terminated by the Board of Directors on any Exercise
Date if the Board  determines  that the  termination  of the Plan is in the best
interests of the Company and its shareholders.  Except as provided in Section 18
hereof, no amendment may make any change in any option theretofore granted which
adversely  affects the rights of any  participant.  To the extent  necessary  to
comply with Rule 16b-3 or under Section 423 of the Code (or any  successor  rule
or provision  or any other  applicable  law or  regulation),  the Company  shall
obtain shareholder approval in such a manner and to such a degree as required.

                                      -7-
(b) Without  shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely  affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period,  establish  the  exchange  ratio  applicable  to amounts  withheld  in a
currency other than U.S.  dollars,  permit payroll  withholding in excess of the
amount  designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections,  establish
reasonable  waiting and  adjustment  periods  and/or  accounting  and  crediting
procedures  to ensure that amounts  applied  toward the purchase of Common Stock
for  each  participant  properly  correspond  with  amounts  withheld  from  the
participant's  Compensation,  and establish such other limitations or procedures
as the Board (or its  committee)  determines  in its sole  discretion  advisable
which are consistent with the Plan.

         20. Notices.  All notices or other  communications  by a participant to
the Company  under or in  connection  with the Plan shall be deemed to have been
duly given when  received in the form  specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         21. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option  unless the  exercise of such option and the  issuance  and
delivery of such  shares  pursuant  thereto  shall  comply  with all  applicable
provisions  of law,  domestic or foreign,  including,  without  limitation,  the
Securities Act of 1933, as amended (the "1933 Act"), the Exchange Act, the rules
and  regulations  promulgated  thereunder,  and the  requirements  of any  stock
exchange upon which the shares may then be listed,  and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

                  As a condition to the  exercise of an option,  the Company may
require the person  exercising  such option to represent and warrant at the time
of any such exercise that the shares are being purchased only for investment and
without  any  present  intention  to sell or  distribute  such shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the  aforementioned  applicable  provisions  of law.

         22. Term of Plan.  The Plan shall become  effective upon the earlier to
occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders of the Company.  It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.

         23.  Automatic  Transfer to Low Price  Offering  Period.  To the extent
permitted  by Rule 16b-3 of the  Exchange  Act, if the Fair Market  Value of the
Common Stock on any Exercise  Date in an Offering  Period is lower than the Fair
Market Value of the Common Stock on the Enrollment Date of such Offering Period,
then all participants in such Offering Period shall be  automatically  withdrawn
from such Offering Period immediately after the exercise of their option on such
Exercise  Date  and  automatically  re-enrolled  in  the  immediately  following
Offering Period as of the first day thereof.

                                      -8-
EXHIBIT A

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

                                                               Enrollment Date:

________      Original Application
________      Change in Payroll Deduction Rate
________      Change of Beneficiary(ies)

         1.  ________________________   hereby  elects  to  participate  in  the
Pinnacle  Systems,  Inc. 1994 Employee Stock Purchase Plan (the "Employee  Stock
Purchase Plan") and subscribes to purchase shares of the Company's  Common Stock
in accordance with this  Subscription  Agreement and the Employee Stock Purchase
Plan.

         2. I hereby  authorize  payroll  deductions  from each  paycheck in the
amount of ____% of my  Compensation  on each payday  (1-15%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)

         3. I understand that said payroll  deductions  shall be accumulated for
the  purchase  of  shares  of  Common  Stock at the  applicable  Purchase  Price
determined in accordance  with the Employee  Stock  Purchase  Plan. I understand
that if I do not  withdraw  from an Offering  Period,  any  accumulated  payroll
deductions will be used to automatically exercise my option.

         4. I have received a copy of the complete "Pinnacle Systems,  Inc. 1994
Employee  Stock  Purchase  Plan."  I  understand  that my  participation  in the
Employee  Stock  Purchase  Plan is in all  respects  subject to the terms of the
Plan.  I  understand   that  my  ability  to  exercise  the  option  under  this
Subscription  Agreement  is subject to  obtaining  shareholder  approval  of the
Employee Stock Purchase Plan.

         5. Shares  purchased  for me under the  Employee  Stock  Purchase  Plan
should be issued in the name(s) of (Employee or Employee and
spouse only):  _____________________________.

         6. I understand that if I dispose of any shares received by me pursuant
to the Plan within two (2) years after the Enrollment Date (the first day of the
Offering  Period during which I purchased such shares) or one (1) year after the
Exercise  Date,  I will be treated  for  federal  income tax  purposes as having
received  ordinary income at the time of such  disposition in an amount equal to
the excess of the fair  market  value of the shares at the time such shares were
purchased  over the price which I paid for the shares.  I hereby agree to notify
the Company in writing within thirty (30) days after the date of any disposition
of my shares and I will make adequate provision for Federal,  state or other tax
withholding obligations,  if any, which arise upon the disposition of the Common
Stock.  The  Company  may,  but  will  not be  obligated  to,  withhold  from my
compensation the amount necessary to meet any applicable  withholding obligation
including  any  withholding  necessary to make  available to the Company any tax
deductions or benefits
attributable to sale or early disposition of Common Stock by me. If I dispose of
such  shares at any time  after the  expiration  of the two (2) year and one (1)
year holding periods, I understand that I will be treated for federal income tax
purposes as having  received  income only at the time of such  disposition,  and
that such  income  will be taxed as  ordinary  income  only to the  extent of an
amount  equal to the  lesser of (1) the excess of the fair  market  value of the
shares at the time of such  disposition over the purchase price which I paid for
the shares,  or (2) 15% of the fair market  value of the shares on the first day
of the Offering  Period.  The remainder of the gain, if any,  recognized on such
disposition will be taxed as capital gain.

         7. I hereby agree not to sell or otherwise transfer any shares or other
securities  of the  Company  during  the one  hundred  eighty  (180) day  period
following the effective  date of a  registration  statement of the Company filed
under the  Securities  Act of 1933,  as  amended  (the  "1933  Act");  provided,
however,  that such  restriction  shall only apply to the first two registration
statements of the Company to become  effective  under the 1933 Act which include
securities to be sold on behalf of the Company to the public in an  underwritten
public  offering under the 1933 Act. I hereby  acknowledge  that the Company may
impose  stop-transfer  instructions  with respect to  securities  subject to the
foregoing  restrictions  until  the end of such one  hundred  eighty  (180)  day
period.

         8. I  hereby  agree to be bound  by the  terms  of the  Employee  Stock
Purchase Plan. The  effectiveness  of this  Subscription  Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.

         9. In the event of my death,  I hereby  designate  the  following as my
beneficiary(ies)  to receive all  payments  and shares due me under the Employee
Stock Purchase Plan:

NAME:  (Please print)
                     -----------------------------------------------------------
                         (First)                   (Middle)          (Last)

Relationship

                                        (Address)

Employee's Social
Security Number:
                                        ----------------------------------------

Employee's Address:
                                        ----------------------------------------

I UNDERSTAND THAT THIS SUBSCRIPTION  AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
       -----------------------------        ------------------------------------
                                            Signature of Employee

                                            Spouse's Signature (If beneficiary
                                            other than spouse)

                                      -2-
EXHIBIT B

                             PINNACLE SYSTEMS, INC.

                        1994 EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

         The  undersigned  participant  in the  Offering  Period of the Pinnacle
Systems,  Inc. 1994 Employee  Stock  Purchase Plan which began on  ____________,
19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby
withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the  undersigned  as  promptly  as  practicable  all the  payroll  deductions
credited  to his or her  account  with  respect  to such  Offering  Period.  The
undersigned  understands  and agrees  that his or her  option for such  Offering
Period will be automatically  terminated.  The undersigned  understands  further
that no further  payroll  deductions  will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate
in  succeeding  Offering  Periods  only  by  delivering  to  the  Company  a new
Subscription Agreement.

                                       Name and Address of Participant:

                                       -----------------------------------------

                                       -----------------------------------------

                                       Signature:

         Date:
              ------------------------------------------------