<PAGE>

                                                                   Exhibit 10.23


                                 AMENDMENT NO. 1

     THIS AMENDMENT NO. 1 (the "Amendment") to the Agreement and Plan of Merger
                                ---------
dated as of March 29, 2000 (the "Agreement") among Pinnacle Systems, Inc., a
                                 ---------
California corporation ("Purchaser"), 1117 Acquisition Corporation, a Delaware
                         ---------
corporation and wholly-owned subsidiary of Purchaser ("1117 Acquisition Corp."),
                                                       ----------------------
Digital Editing Services, Inc., a Delaware corporation (the "Company"), David
                                                             -------
Engelke and Bryan Engelke (Messrs. Engelke are referred to individually as a

"Shareholder" and collectively as the "Shareholders") is effective as of October
 -----------                           ------------
30, 2000 by and among Purchaser, 1117 Acquisition Corp. and the Shareholders.

                                    RECITALS

     A. Purchaser, Company, 1117 Acquisition Corp. and the Shareholders entered
into the Agreement providing for the merger of Company with and into 1117
Acquisition Corp. and the survival of 1117 Acquisition Corp. (the "Surviving
                                                                   ---------
Corporation").
-----------

     B. Purchaser, Surviving Corporation and the Shareholders desire to make
certain amendments to the Agreement as set forth in this Amendment.

     NOW, THEREFORE, the parties hereby agree to amend the Agreement as follows:

     1. Paragraphs (a), (b), (c) and (d) of Section 1.7 of the Agreement are
amended and restated to read as follows:

         1.7 Earnout Payment.
             ---------------

             (a) Definitions For Determination of Earnout Payment.
                 ------------------------------------------------

                 (i) "Avid Sports" shall mean the division of Purchaser
                      -----------
     operating as Avid Sports;

                 (ii) "Avid Sports Earnout Period" shall mean July 1, 2000 to
                       --------------------------
     March 29, 2001 inclusive;

                 (iii) "Avid Sports Expenses" shall mean (A) all cost of goods
                        --------------------
     sold attributable to Avid Sports Revenue, (B) to the extent not included in
     clause (A) of this paragraph (iii), all costs and expenses incurred by Avid
     Sports (operating as a division of Purchaser) during the Avid Sports
     Earnout Period (calculated in accordance with generally accepted accounting
     principles ("GAAP") applied on a consistent basis with that used by
                  ----
     Purchaser), including all selling, general and administrative expenses and
     engineering, research and development expenses, and all research and
     development expenses incurred by the employees of Avid Sports who remain
     employed by Purchaser and who are designing, developing and improving Avid
     Sports Products. With respect to clause (B) of the preceding sentence,
     because certain selling, general and administrative expenses and marketing
     expenses attributable to the generation of Avid Sports Revenues cannot
     easily be separated from selling, general and administrative expenses and
     marketing attributable to revenues of Purchaser that are not Avid Sports
     Revenues, there shall be allocated to Avid Sports Expenses as follows: an
     amount equal to (but not greater than) 5% of Avid Sports Revenues


<PAGE>

     for corporate selling, general and administrative expenses, and 5% of Avid
     Sports Revenues for corporate marketing expenses.

          Avid Sports Expenses shall not include costs or expenses attributable
     to (1) interest expense, (2) income Taxes, (3) amortization of goodwill or
     (4) any portion of the Earnout Payment. Anything in this definition to the
     contrary notwithstanding, all costs of goods sold attributable to Avid
     Sports Resale Goods shall be excluded from the calculation of Avid Sports
     Expenses. "Avid Sports Resale Goods" shall mean products of Panasonic and
                ------------------------
     JVC sold by Avid Sports;

                 (iv) "Avid Sports Operating Profit" shall mean the difference
                       ----------------------------
     obtained by subtracting Avid Sports Expenses from Avid Sports Revenues;

                 (v) "Avid Sports Revenues" shall mean gross revenues
                      --------------------
    (calculated in accordance with GAAP applied on a consistent basis with that
     used by Purchaser) recognized by Avid Sports (operating as a division of
     Purchaser) that are attributable to sales of the following products during
     the Avid Sports Earnout Period, net of customary and reasonable reserves
     established in connection with potential returns of any such products: (A)
     products that were being sold by Avid Sports as of July 1, 2000 ("Existing
                                                                       ---------
     Avid Sports Products"), (B) products that are enhancements, updates,
     --------------------
     improvements, releases, new features and other modifications and all works
     which constitute "derivative works" of the Existing Avid Sports Products,
     as such term is defined in 12 U.S. Code Section 101 ("Avid Sports
                                                           -----------
     Derivative Products") and (C) new products designed, developed and/or
     -------------------
     shipped by Avid Sports (operating as a division of Purchaser) (the products
     described in clauses (A), (B) and (C) are collectively referred to as the
     "Avid Sports Products").
      --------------------

         Avid Sports Revenues shall not include revenue attributable to sales of
     the following products (1) products that were being sold by Purchaser as of
     the date of the Agreement ("Existing Purchaser Products"), (2) products
                                 ---------------------------
     that are enhancements, updates, improvements, releases, new features and
     other modifications and all works that constitute "derivative works" of the
     Existing Purchaser Products, other than Avid Sports Derivative Products,
     and (3) new Purchaser products that are not included within clauses (A),
     (B) and (C) of the preceding paragraph. Anything in this definition to the
     contrary notwithstanding, all revenues attributable to Avid Sports Resale
     Goods shall be excluded from the calculation of Avid Sports Revenues.

                 (vi) "Company Earnout Period" shall mean the 12 month period
                       ----------------------
     commencing on the date of the Agreement;

                 (vii) "Company Expenses" shall mean (A) all cost of goods sold
                        ----------------
     attributable to Company Revenue, (B) to the extent not included in clause
     (A) of this paragraph (vii), all costs and expenses incurred by Company
     (operating as a division of Purchaser) during the Company Earnout Period
     (calculated in accordance with generally accepted accounting principles
     ("GAAP") applied on a consistent basis with that used by Purchaser),
       ----
     including all selling, general and administrative expenses and engineering,
     research and development expenses, and all research and development
     expenses incurred by the employees of Company who remain employed by
     Purchaser and who are designing, developing and improving Company Products.
     With respect to clause (B) of the preceding


                                      -2-

<PAGE>

     sentence, because certain selling, general and administrative expenses and
     marketing expenses attributable to the generation of Company Revenues
     cannot easily be separated from selling, general and administrative
     expenses and marketing attributable to revenues of Purchaser that are not
     Company Revenues, there shall be allocated to Company Expenses as follows:
     an amount equal to (but not greater than) 5% of Company Revenues for
     corporate selling, general and administrative expenses, and 5% of Company
     Revenues for corporate marketing expenses.

             Company Expenses shall not include costs or expenses attributable
     to (1) interest expense, (2) income Taxes, (3) amortization of goodwill or
     (4) any portion of the Company Earnout Payment. Anything in this definition
     to the contrary notwithstanding, all costs of goods sold attributable to
     Company Resale Goods (as defined below) shall be excluded from the
     calculation of Company Expenses. "Company Resale Goods" shall mean products
                                       --------------------
    of Panasonic and JVC sold by the Company;

                 (viii) "Company Operating Profit" shall mean the difference
                         ------------------------
     obtained by subtracting Company Expenses from Company Revenues;

                 (ix) "Company Revenues" shall mean gross revenues (calculated
                       ----------------
     in accordance with GAAP applied on a consistent basis with that used by
     Purchaser) recognized by the Company (operating as a division of
     Purchaser) that are attributable to sales of the following products during
     the Company Earnout Period, net of customary and reasonable reserves
     established in connection with potential returns of any such products: (A)
     products that were being sold by the Company as of the date of the
     Agreement ("Existing Company Products"), (B) products that are
                 -------------------------
     enhancements, updates, improvements, releases, new features and other
     modifications and all works which constitute "derivative works" of the
     Existing Company Products, as such term is defined in 12 U.S. Code Section
     101 ("Company Derivative Products") and (C) new products designed,
           ---------------------------
     developed and/or shipped by the Company (operating as a division of
     Purchaser) (the products described in clauses (A), (B) and (C) are
     collectively referred to as the "Company Products").
                                      ----------------

             Company Revenues shall not include revenue attributable to sales of
     the following products (1) Existing Purchaser Products, (2) products that
     are enhancements, updates, improvements, releases, new features and other
     modifications and all works that constitute "derivative works" of the
     Existing Purchaser Products, other than Company Derivative Products, and
     (3) new Purchaser products that are not included within clauses (A), (B)
     and (C) of the preceding paragraph. Anything in this definition to the
     contrary notwithstanding, all revenues attributable to Company Resale Goods
     shall be excluded from the calculation of Company Revenues;

                 (x) "Earnout Periods" shall mean the Avid Sports Earnout Period
                      ---------------
     and the Company Earnout Period, collectively;

                 (xi) "Earnout Trading Price" shall be the average of the last
                       ---------------------
     sale prices of a share of Purchaser Common Stock as reported on the Nasdaq
     National Market for the 20 trading days ending immediately prior to the
     date of final determination of the Earnout Payment in accordance with this
     Section 1.7;
     -----------

                                       -3-


<PAGE>

                 (xii) "Resale Goods" shall mean Avid Sports Resale Goods and
                        ------------
     Company Resale Goods;

                 (xiii) "Total Expenses" shall mean the sum of Avid Sports
                         --------------
     Expenses and Company Expenses;

                 (xiv) "Total Operating Profit" shall mean the difference
                        ----------------------
     obtained by subtracting Total Expenses from Total Revenues; and

                 (xv) "Total Revenues" shall mean the sum of Avid Sports
                       --------------
     Revenues and Company Revenues.

     For purposes of calculation of the Earnout Payment, references to Company
     shall mean references to the Surviving Corporation.

             (b) Calculation of Earnout Payment. In the event that during the
                 ------------------------------
     Earnout Periods:

                     (1) Total Operating Profit exceeds 10% of Total Revenues,
     Shareholders shall be entitled to receive a payment equal to (x) 55% of
     Total Revenues for the Earnout Periods minus (y) $7.0 million, payable in
     accordance with Section 1.7(c); or
                     --------------

                     (2) Total Operating Profit exceeds 15% of Total Revenues,
     Shareholders shall be entitled to receive a payment equal to (x) 77% of
     Total Revenues for the Earnout Periods minus (y) $7.0 million, payable in
     accordance with Section 1.7(c); or
                     --------------

                     (3) Total Operating Profit exceeds 20% of Total Revenues,
     Shareholders shall be entitled to receive a payment equal to (x) 96% of
     Total Revenues for the Earnout Periods minus (y) $7.0 million, payable in
     accordance with Section 1.7(c).
                     --------------

         No Earnout Payment shall be made if Total Operating Profit does not
     exceed 10% of Total Revenues during the Earnout Periods. To the extent that
     Total Operating Profit exceeds Total Revenues by a percentage other than
     10%, 15% and 20%, Shareholders shall be entitled to receive a payment equal
     to that percentage of Total Revenue for the Earnout Periods determined by
     applying a straight-line, pro rata calculation of between 55% and 77% (if
     Total Operating Profit exceeds Total Revenues by a percentage that falls
     between 10% and 15%), between 77% and 96% (if Total Operating Profit
     exceeds Total Revenues by a percentage that falls between 15% and 20%), and
     96% (if Total Operating Profit exceeds Total Revenues by a percentage that
     falls above 20%), minus, in each case $7.0 million. The provisions of this
     paragraph shall not apply to the additional Earnout Payment referred to in
     the next paragraph of this subsection (b).

         In addition, there shall be added to any Earnout Payment otherwise
     payable an amount equal to twice the gross margin earned by Avid Sports and
     the Company, collectively, attributable to the sale of Resale Goods during
     the Earnout Periods, calculated in accordance with GAAP as consistently
     applied by Purchaser, anything herein to the contrary notwithstanding.

                                       -4-

<PAGE>

             (c) Payment of Earnout. In the event that an Earnout Payment is
                 ------------------
     payable in accordance with Section 1.7(b), Purchaser shall pay to the
                                --------------
     Shareholders that number of shares of Purchaser Common Stock equal to the
     quotient of (x) the amount of the Earnout Payment divided by (y) the
     Earnout Trading Price. In the event that the issuance of the shares of
     Purchaser Common Stock in satisfaction of the Earnout Payment would trigger
     a requirement of Purchaser shareholder approval of the transactions
     contemplated hereby under Section 903 of the California General Corporation
     Law, Purchaser agrees to promptly solicit its shareholders for such
     approvals as would be necessary for the issuance of such shares and use its
     best efforts to obtain such approval. If such approval is not forthcoming,
     the amount not able to be so paid by the Purchaser in shares shall be paid
     in immediately available funds. Payment of the Earnout Payment shall be
     made within 45 days after the end of the Earnout Periods unless the
     Shareholders give notice of disagreement to the Purchaser in accordance
     with Section 1.7(d)(ii), in which case, the Earnout Payment shall be made
          ------------------
     within 15 days following final resolution of such disagreement or, if any
     approvals of Purchaser's shareholders is required, within three business
     days of the receipt of such approvals (or the date that such approval is
     voted down by the shareholders of Purchaser, as the case may be). Any
     Purchaser Shares issued to the Shareholders shall be issued to the
     Shareholders pro rata in accordance with the percentage ownership of the
     Company as of the date hereof as set forth on Schedule 1.1 hereto. In the
                                                   ------------
     event that any portion of the Earnout Payment is not made within 45 days
     after the end of the Earnout Periods, interest shall accrue and be payable
     by the Purchaser on the unpaid portion at the prime lending rate of
     Citibank, N.A. then in effect as specified in the Wall Street Journal
     beginning on the forty sixth day following the Earnout Periods through the
     date on which such amounts are paid; provided, however, that such interest
                                          --------  -------
     shall be payable in shares of Purchaser Common Stock, calculated and
     payable in the same manner as the Earnout Payment.

             (d) Mechanics for Determination of Total Revenues, Total Expenses
                 -------------------------------------------------------------
     and Total Operating Profit.
     --------------------------

                 (i) Not later than 30 calendar days following the end of the
     Earnout Periods, Purchaser shall deliver to the Shareholders a statement of
     the Total Revenues, Total Expenses and Total Operating Profit for the
     Earnout Periods as well as the calculation of gross margin on the Resale
     Goods (the "Statement of Total Operating Profit"), which will be determined
                 -----------------------------------
     in accordance with GAAP applied on a basis consistent with that used by
     Purchaser (both historically and during the Earnout Periods) in preparation
     of Purchaser's consolidated financial statements and certified to such
     effect by Purchaser's Chief Financial Officer.

                 (ii) Not later than 30 calendar days following the end of the
     Avid Sports Earnout Period, Purchaser shall deliver to the Shareholders a
     statement of the Avid Sports Revenues, Avid Sports Expenses and Avid Sports
     Operating Profit for the Avid Sports Earnout Period as well as the
     calculation of gross margin on the Avid Sports Resale Goods (the "Statement
                                                                       ---------
     of Avid Sports Operating Profit"), which will be determined in accordance
     -------------------------------
     with GAAP applied on a basis consistent with that used by Purchaser (both
     historically and during the Avid Sports Earnout Period) in preparation of
     Purchaser's consolidated financial statements and certified to such effect
     by Purchaser's Chief Financial Officer.

                                       -5-


<PAGE>

                 (iii) Not later than 30 calendar days following the end of the
     Company Earnout Period, Purchaser shall deliver to the Shareholders a
     statement of the Company Revenues, Company Expenses and Company Operating
     Profit for the Company Earnout Period as well as the calculation of gross
     margin on the Company Resale Goods (the "Statement of Company Operating
                                              ------------------------------
     Profit"), which will be determined in accordance with GAAP applied on a
     ------
     basis consistent with that used by Purchaser (both historically and during
     the Company Earnout Period) in preparation of Purchaser's consolidated
     financial statements and certified to such effect by Purchaser's Chief
     Financial Officer. The Statement of Total Operating Profit, the Statement
     of Avid Sports Operating Profit and the Statement of Company Operating
     Profit shall collectively be referred to herein as the "Statements").
                                                             ----------

                 (iv) If, within 30 days following receipt by the Shareholders
     of the Statements, the Shareholders determine in good faith that the amount
     of Avid Sports Revenue, Avid Sports Expenses, Avid Sports Operating Profit,
     Company Revenue, Company Expenses, Company Operating Profit, Total Revenue,
     Total Expenses, Total Operating Profit, or said gross margin as so computed
     on one or more of the Statements is inaccurate, the Shareholders shall give
     notice to Purchaser within such 30 day period, (A) setting forth the
     Shareholders' determination of the Avid Sports Operating Profit, Company
     Operating Profit, Total Operating Profit and/or Avid Sports Revenue,
     Company Revenue and Total Revenue, as applicable, and (B) specifying in
     reasonable detail the nature of the Shareholders' basis for its
     disagreement with Purchaser' calculation (including whether Avid Sports
     Operating Profit, Company Operating Profit and/or Total Operating Profit,
     as applicable, was maximized in the application of GAAP); provided,
                                                               --------
     however, that the Shareholders shall be provided with full access to
     -------
     Purchaser's financial records in connection with the Shareholders'
     determination of Avid Sports Operating Profit, Company Operating Profit,
     Total Operating Profit and/or Avid Sports Revenue, Company Revenue and
     Total Revenue, as applicable, and, consistent with Purchaser's best
     efforts, the work papers of Purchaser's accountants. The failure of the
     Purchaser to provide the Shareholder with full access to the Purchaser's
     financial records shall constitute Purchaser's acceptance of the
     Shareholders' determination of Avid Sports Operating Profit, Company
     Operating Profit, Total Operating Profit and/or Avid Sports Revenue,
     Company Revenue and Total Revenue, as applicable. The failure by the
     Shareholders to express its disagreement within such 30 day period shall
     constitute acceptance by Shareholders of the amount of Avid Sports
     Operating Profit, Company Operating Profit, Total Operating Profit and/or
     Avid Sports Revenue, Company Revenue and Total Revenue so computed on the
     Statements. If Purchaser and the Shareholders are unable to resolve their
     disagreement within 15 days after receipt by Purchaser of notice of such
     disagreement, the items in dispute, including whether the Avid Sports
     Operating Profit, Company Operating Profit and/or Total Operating Profit,
     as applicable, was maximized in the application of GAAP, will be referred
     to a "big five" accounting firm selected by the Shareholders (the
     "Accountant") within such 15 day period. The Accountant shall make a
      ----------
     determination as to each of the items in dispute (including, if requested,
     the ascertation of whether Avid Sports Operating Profit, Company Operating
     Profit and/or Total Operating Profit, as applicable, was maximized
     consistent with GAAP), which determination shall be (i) in writing, (ii)
     furnished to Purchaser and the Shareholders as promptly as practicable
     after the items in dispute have been referred to the Accountant, (iii) made
     in accordance with the accounting principles and procedures provided for in
     Section 1.7(d)(i) above for the preparation of the Statements and (iv)
     -----------------
     conclusive and binding

                                       -6-

<PAGE>

     on Purchaser and the Shareholders. The fees and expenses of the Accountant
     (the "Accounting Fees") shall be paid half by Purchaser and half by the
           ---------------
     Shareholders. Any amounts of the Earnout Payment that are not in dispute
     shall be paid within three business days after agreement by the parties
     with respect thereto.

         2. This Amendment shall be governed by California law and may be
     executed in counterparts, each of which shall be deemed an original and all
     of which shall constitute one instrument.

     3. Except as expressly amended by this Amendment, all provisions of the
     Agreement shall remain in full force and effect.

                  [Remainder of Page Intentionally Left Blank]

                                       -7-


<PAGE>

               IN WITNESS WHEREOF, the parties execute this Amendment as of the
date referred to above.

                                Pinnacle Systems, Inc.,
                                a California corporation


                                By:  /s/ Robert Wilson
                                     ---------------------------------------
                                Title: President, Broadcast Solutions Division
                                       -------------------------------------


                                1117 Acquisition Corporation,
                                a Delaware corporation


                                By:  /s/ Robert Wilson
                                     ---------------------------------------
                                Title: President
                                       -------------------------------------


                                David Engelke
                                     /s/ David Engelke
                                --------------------------------------------


                                Bryan Engelke
                                     /s/ Bryan Engelke
                                --------------------------------------------


                                       -8-