Exhibit 4.2

                             PINNACLE SYSTEMS, INC.

                             1996 STOCK OPTION PLAN

                             (As amended July 2000)

         1. Purposes of the Plan. The purposes of this Plan are:

                  o to  attract  and  retain the best  available  personnel  for
                    positions of substantial responsibility,

                  o to provide additional incentive to Employees,  Directors and
                    Consultants, and


                  o to promote the success of the Company's business.

         Options  granted  under  the Plan may be  Incentive  Stock  Options  or
Nonstatutory  Stock Options,  as determined by the  Administrator at the time of
grant.

         2. Definitions. As used herein, the following definitions shall apply:

                  (a)  "Administrator"  means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.

                  (b) "Applicable  Laws" means the requirements  relating to the
administration  of stock option  plans under U. S. state  corporate  laws,  U.S.
federal and state  securities  laws,  the Code,  any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable  laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

                  (c) "Board" means the Board of Directors of the Company.

                  (d)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
amended.

                  (e)  "Committee"  means a committee of Directors  appointed by
the Board in accordance with Section 4 of the Plan.

                  (f) "Common Stock" means the Common Stock of the Company.

                  (g) "Company" means PINNACLE SYSTEMS, INC.

                  (h)  "Consultant"  means any  person,  including  an  advisor,
engaged by the  Company or a Parent or  Subsidiary  to render  services  to such
entity.

                  (i) "Director" means a member of the Board.

                  (j)  "Disability"  means  total and  permanent  disability  as
defined in Section 22(e)(3) of the Code.


<PAGE>


                  (k)  "Employee"  means  any  person,  including  Officers  and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service  Provider shall not cease to be an Employee in the case of (i) any leave
of absence  approved by the Company or (ii) transfers  between  locations of the
Company or between the Company,  its Parent,  any Subsidiary,  or any successor.
For purposes of Incentive  Stock Options,  no such leave may exceed ninety days,
unless  reemployment  upon  expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option  held by the  Optionee  shall cease to be treated as an  Incentive  Stock
Option and shall be treated for tax  purposes as a  Nonstatutory  Stock  Option.
Neither  service as a Director  nor payment of a  director's  fee by the Company
shall be sufficient to constitute "employment" by the Company.

                  (l) "Exchange Act" means the Securities  Exchange Act of 1934,
as amended.

                  (m) "Fair Market  Value" means,  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 or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market  Value  shall be the closing  sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of  determination,  as reported in
The  Wall  Street  Journal  or such  other  source  as the  Administrator  deems
reliable;

                           (ii) If the  Common  Stock is  regularly  quoted by a
recognized  securities  dealer but  selling  prices are not  reported,  the Fair
Market  Value of a Share of Common  Stock shall be the mean between the high bid
and low asked prices for the Common  Stock on the last market  trading day prior
to the day of  determination,  as reported  in The Wall  Street  Journal or such
other source as the Administrator deems reliable;

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

                  (n)  "Incentive  Stock  Option"  means an Option  intended  to
qualify as an incentive  stock  option  within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                  (o)  "Nonstatutory  Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

                  (p)  "Notice of Grant"  means a written or  electronic  notice
evidencing  certain  terms and  conditions of an  individual  Option grant.  The
Notice of Grant is part of the Option Agreement.

                  (q) "Officer"  means a person who is an officer of the Company
within  the  meaning  of  Section  16 of the  Exchange  Act  and the  rules  and
regulations promulgated thereunder.

                  (r)  "Option"  means a stock  option  granted  pursuant to the
Plan.

                  (s) "Option  Agreement" means an Agreement between the Company
and an Optionee  evidencing  the terms and  conditions of an  individual  Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.


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                  (t)  "Option   Exchange   Program"  means  a  program  whereby
outstanding  options  are  surrendered  in  exchange  for  options  with a lower
exercise price.

                  (u)  "Optioned  Stock"  means the Common  Stock  subject to an
Option.

                  (v)  "Optionee"  means  the  holder of an  outstanding  Option
granted under the Plan.

                  (w)  "Parent"  means a "parent  corporation,"  whether  now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (x) "Plan" means this 1996 Stock Option Plan.

                  (y) "Rule  16b-3"  means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3,  as in effect when  discretion is being  exercised with
respect to the Plan.

                  (z)  "Service   Provider"  means  an  Employee,   Director  or
Consultant.


                  (aa) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

                  (bb) "Subsidiary"  means a "subsidiary  corporation",  whether
now or hereafter existing, as defined in Section 424(f) of the Code.

         3. Stock Subject to the Plan.  Subject to the  provisions of Section 12
of the Plan,  the maximum  aggregate  number of Shares which may be optioned and
sold under the Plan is  5,740,000  Shares.  The Shares  may be  authorized,  but
unissued, or reacquired Common Stock.

                  If an Option expires or becomes  unexercisable  without having
been  exercised  in full,  or is  surrendered  pursuant  to an  Option  Exchange
Program,  the  unpurchased  Shares  which  were  subject  thereto  shall  become
available  for  future  grant  or sale  under  the  Plan  (unless  the  Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan shall not be  returned to the Plan and shall not become  available  for
future distribution under the Plan.

         4. Administration of the Plan.

                 (a) Procedure.

                           (i) Multiple  Administrative  Bodies. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

                           (ii)   Section   162(m).   To  the  extent  that  the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based  compensation" within the meaning of Section 162(m) of the
Code,  the Plan shall be  administered  by a Committee  of two or more  "outside
directors" within the meaning of Section 162(m) of the Code.

                           (iii) Rule 16b-3. To the extent  desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder  shall be structured to satisfy the  requirements  for exemption under
Rule 16b-3.


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<PAGE>

                           (iv) Other  Administration.  Other  than as  provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                  (b) Powers of the Administrator.  Subject to the provisions of
the  Plan,  and in the  case of a  Committee,  subject  to the  specific  duties
delegated  by the Board to such  Committee,  the  Administrator  shall  have the
authority, in its discretion:

                           (i) to determine the Fair Market Value;

                           (ii) to select the Service  Providers to whom Options
may be granted hereunder;

                           (iii) to  determine  the  number  of shares of Common
Stock to be covered by each Option granted hereunder;

                           (iv) to approve  forms of Agreement for use under the
Plan;

                           (v)  to  determine  the  terms  and  conditions,  not
inconsistent with the terms of the Plan, of any Option granted  hereunder.  Such
terms and conditions  include,  but are not limited to, the exercise price,  the
time or times when Options may be exercised  (which may be based on  performance
criteria),  any vesting acceleration or waiver of forfeiture  restrictions,  and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto,  based in each case on such factors as the  Administrator,  in
its sole discretion, shall determine;

                           (vi) Reserved;

                           (vii) Reserved;

                           (viii) to  construe  and  interpret  the terms of the
Plan and awards granted pursuant to the Plan;

                           (ix)  to  prescribe,  amend  and  rescind  rules  and
regulations  relating to the Plan,  including rules and regulations  relating to
sub-plans  established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                           (x) to  modify  or  amend  each  Option  (subject  to
Section 14(c) of the Plan), including the discretionary  authority to extend the
post-termination  exercisability  period of  Options  longer  than is  otherwise
provided for in the Plan;

                           (xi) to allow  Optionees to satisfy  withholding  tax
obligations  by  electing  to have the  Company  withhold  from the Shares to be
issued upon  exercise  of an Option  that number of Shares  having a Fair Market
Value equal to the amount required to be withheld.  The Fair Market Value of the
Shares to be withheld  shall be determined on the date that the amount of tax to
be withheld is to be  determined.  All  elections  by an Optionee to have Shares
withheld for this purpose  shall be made in such form and under such  conditions
as the Administrator may deem necessary or advisable;


                           (xii) to authorize any person to execute on behalf of
the Company any instrument  required to effect the grant of an Option previously
granted by the Administrator;


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<PAGE>


                           (xiii)  to  make  all  other  determinations   deemed
necessary or advisable for administering the Plan.


                  (c) Effect of Administrator's  Decision.  The  Administrator's
decisions,  determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

                  (d) Option Exchange Program.  The Administrator  shall have no
authority to institute an Option Exchange Program.

         5.  Eligibility.  Nonstatutory  Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

         6. Limitations.

                  (a) Each Option shall be designated in the Option Agreement as
either an  Incentive  Stock  Option or a  Nonstatutory  Stock  Option.  However,
notwithstanding  such designation,  to the extent that the aggregate Fair Market
Value  of  the  Shares  with  respect  to  which  Incentive  Stock  Options  are
exercisable  for the first time by the Optionee  during any calendar year (under
all plans of the Company and any Parent or Subsidiary)  exceeds  $100,000,  such
Options shall be treated as  Nonstatutory  Stock  Options.  For purposes of this
Section 6(a),  Incentive  Stock Options shall be taken into account in the order
in which  they  were  granted.  The Fair  Market  Value of the  Shares  shall be
determined as of the time the Option with respect to such Shares is granted.

                  (b)  Neither  the Plan nor any  Option  shall  confer  upon an
Optionee any right with respect to continuing the Optionee's  relationship  as a
Service Provider with the Company,  nor shall they interfere in any way with the
Optionee's  right or the Company's  right to terminate such  relationship at any
time, with or without cause.

                  (c)  The  following  limitations  shall  apply  to  grants  of
Options:

                           (i) No  Service  Provider  shall be  granted,  in any
fiscal year of the Company, Options to purchase more than 800,000 Shares.

                           (ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional  400,000
Shares  which shall not be counted  against  the limits set forth in  subsection
6(c)(i) above.

                           (iii) The  foregoing  limitations  shall be  adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 12.

                           (iv) If an Option is canceled in the same fiscal year
of the  Company  in  which  it was  granted  (other  than in  connection  with a
transaction  described  in Section  12),  the  canceled  Option  will be counted
against  the  limits  set  forth in  subsections  (i) and (ii)  above.  For this
purpose, if the exercise price of an Option is reduced,  the transaction will be
treated as a cancellation of the Option and the grant of a new Option.


         7. Term of Plan.  Subject  to  Section  18 of the Plan,  the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 14 of the Plan.


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<PAGE>


         8.  Term of  Option.  The term of each  Option  shall be  stated in the
Option  Agreement.  In the case of an Incentive Stock Option,  the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee  who, at the time the  Incentive  Stock  Option is granted,  owns
stock  representing  more  than ten  percent  (10%) of the  voting  power of all
classes of stock of the  Company or any  Parent or  Subsidiary,  the term of the
Incentive  Stock  Option  shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

         9. Option Exercise Price and Consideration.

                  (a)  Exercise  Price.  The per  share  exercise  price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                           (i) In the case of an Incentive Stock Option

                                    (1) granted to an Employee  who, at the time
the Incentive  Stock Option is granted,  owns stock  representing  more than ten
percent  (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                                    (2)  granted to any  Employee  other than an
Employee  described in paragraph (A) immediately  above,  the per Share exercise
price shall be no less than 100% of the Fair Market  Value per Share on the date
of grant.


                           (ii) In the case of a Nonstatutory  Stock Option, the
per Share exercise price shall be determined by the Administrator,  but shall be
no less than 100% of the Fair Market Value per Share on the date of grant.

                           (iii)  Notwithstanding the foregoing,  Options may be
granted  with a per Share  exercise  price of less than 100% of the Fair  Market
Value per  Share on the date of grant  pursuant  to a merger or other  corporate
transaction.

                  (b) Waiting Period and Exercise  Dates.  At the time an Option
is granted,  the Administrator  shall fix the period within which the Option may
be exercised and shall determine any conditions  which must be satisfied  before
the Option may be exercised.

                  (c) Form of Consideration.  The Administrator  shall determine
the acceptable  form of  consideration  for exercising an Option,  including the
method of payment.  In the case of an Incentive Stock Option,  the Administrator
shall determine the acceptable form of consideration at the time of grant.  Such
consideration may consist entirely of:


                           (i) cash;

                           (ii) check;

                           (iii) promissory note;

                           (iv)  other  Shares  which  (A) in the case of Shares
acquired  upon  exercise of an option,  have been owned by the Optionee for more
than six months on the date of  surrender,  and (B) have a


                                      -6-
<PAGE>


Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said  Option  shall be  exercised;  (v)  consideration
received by the Company under a cashless  exercise  program  implemented  by the
Company in connection with the Plan;

                           (vi)  a  reduction  in  the  amount  of  any  Company
liability  to  the  Optionee,   including  any  liability  attributable  to  the
Optionee's participation in any Company-sponsored  deferred compensation program
or arrangement;

                           (vii) any  combination  of the  foregoing  methods of
payment; or

                           (viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws.

         10. Exercise of Option.

                  (a)  Procedure  for  Exercise;  Rights as a  Shareholder.  Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such  conditions as determined by the  Administrator
and set  forth  in the  Option  Agreement.  Unless  the  Administrator  provides
otherwise,  vesting  of Options  granted  hereunder  shall be tolled  during any
unpaid  leave of  absence.  An Option may not be  exercised  for a fraction of a
Share.

                           An Option shall be deemed  exercised when the Company
receives:  (i) written or electronic  notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment  for the Shares  with  respect to which the  Option is  exercised.  Full
payment may consist of any consideration and method of payment authorized by the
Administrator  and permitted by the Option Agreement and the Plan. Shares issued
upon  exercise of an Option  shall be issued in the name of the  Optionee or, if
requested  by the  Optionee,  in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate  entry on the books
of the Company or of a duly authorized transfer agent of the Company),  no right
to vote or receive  dividends or any other rights as a  shareholder  shall exist
with respect to the Optioned Stock,  notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares  promptly  after the
Option is exercised.  No  adjustment  will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued,  except as
provided in Section 12 of the Plan.

                           Exercising an Option in any manner shall decrease the
number of Shares  thereafter  available,  both for  purposes of the Plan and for
sale  under the  Option,  by the  number  of  Shares  as to which the  Option is
exercised.

                  (b) Termination of Relationship as a Service  Provider.  If an
Optionee ceases to be a Service  Provider,  other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is  specified  in the Option  Agreement to the extent that the Option is
vested on the date of termination  (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option  Agreement,  the Option shall remain  exercisable
for ninety (90) days  following the Optionee's  termination.  If, on the date of
termination,  the  Optionee  is not vested as to his or her entire  Option,  the
Shares  covered by the unvested  portion of the Option shall revert to the Plan.
If, after  termination,  the Optionee does not exercise his or her Option within


                                      -7-
<PAGE>


the time specified by the  Administrator,  the Option shall  terminate,  and the
Shares covered by such Option shall revert to the Plan.

                  (c)  Disability  of  Optionee.  If an Optionee  ceases to be a
Service  Provider  as a result  of the  Optionee's  Disability  or the  Optionee
suffers  a  Disability  within  ninety  (90)  days of  ceasing  to be a  Service
Provider, the Optionee may exercise his or her Option within such period of time
as is  specified  in the Option  Agreement to the extent the Option is vested on
the date of  termination  (but in no event later than the expiration of the term
of such  Option as set  forth in the  Option  Agreement).  In the  absence  of a
specified time in the Option Agreement,  the Option shall remain exercisable for
one (1) year following Optionee's  termination.  If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered by
the  unvested  portion  of the  Option  shall  revert  to the  Plan.  If,  after
termination,  the Optionee  does not exercise his or her Option  within the time
specified  herein,  the Option shall  terminate,  and the Shares covered by such
Option shall revert to the Plan.

                  (d) Death of  Optionee.  If an  Optionee  dies while a Service
Provider  or within  ninety (90) days of ceasing to be a Service  Provider,  the
Option may be exercised  until the  expiration of the term of such Option as set
forth in the  Notice  of Grant,  by the  Optionee's  estate  or by a person  who
acquires the right to exercise the Option by bequest or inheritance, but only to
the extent that the Option is vested on the date Optionee ceased to be a Service
Provider. If, at the time Optionee ceased to be a Service Provider, the Optionee
is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall  immediately  revert to the Plan.  The Option may be
exercised by the executor or administrator of the Optionee's estate or, if none,
by the person(s)  entitled to exercise the Option under the  Optionee's  will or
the laws of descent or  distribution.  If the Option is not so exercised  within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

                  (e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option  previously  granted based
on  such  terms  and  conditions  as  the  Administrator   shall  establish  and
communicate to the Optionee at the time that such offer is made.

         11.  Non-Transferability of Options. Unless determined otherwise by the
Administrator,  an  Option  may not be sold,  pledged,  assigned,  hypothecated,
transferred,  or disposed of in any manner  other than by will or by the laws of
descent  or  distribution  and may be  exercised,  during  the  lifetime  of the
Optionee,   only  by  the  Optionee.   If  the  Administrator  makes  an  Option
transferable,  such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

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

                  (a) Changes in Capitalization.  Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding  Option, and the number of shares of Common Stock which have
been  authorized for issuance under the Plan but as to which no Options have yet
been  granted  or which  have been  returned  to the Plan upon  cancellation  or
expiration of an Option,  as well as the price per share of Common Stock covered
by each such  outstanding  Option,  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  issued  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,


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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 Administrator  shall notify each
Optionee as soon as  practicable  prior to the  effective  date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise  his or her Option  until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. To the extent it has not
been previously  exercised,  an Option will terminate  immediately  prior to the
consummation of such proposed action.


         (c) Merger or Asset Sale.  In the event of a merger of the Company with
or into another  corporation,  or the sale of substantially all of the assets of
the Company, each outstanding Option shall be assumed or an equivalent option or
right substituted by the successor  corporation or a Parent or Subsidiary of the
successor  corporation.  In the event that the successor  corporation refuses to
assume or substitute  for the Option,  the Optionee shall fully vest in and have
the right to  exercise  the Option as to all of the  Optioned  Stock,  including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and  exercisable in lieu of assumption or  substitution  in
the event of a merger or sale of  assets,  the  Administrator  shall  notify the
Optionee in writing or electronically  that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice,  and
the Option shall terminate upon the expiration of such period.  For the purposes
of this  paragraph,  the Option shall be  considered  assumed if,  following the
merger or sale of assets,  the option or right  confers the right to purchase or
receive,  for each Share of  Optioned  Stock  subject to the Option  immediately
prior to the merger or sale of assets,  the consideration  (whether stock, cash,
or other  securities  or  property)  received in the merger or sale of assets by
holders  of  Common  Stock  for each  Share  held on the  effective  date of the
transaction (and if holders were offered a choice of consideration,  the type of
consideration  chosen by the holders of a majority of the  outstanding  Shares);
provided,  however, that if such consideration received in the merger or sale of
assets is not solely  common stock of the successor  corporation  or its Parent,
the Administrator  may, with the consent of the successor  corporation,  provide
for the  consideration to be received upon the exercise of the Option,  for each
Share of Optioned Stock subject to 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 in the  merger or sale of
assets.

         13.  Date of Grant.  The date of grant of an Option  shall be,  for all
purposes,  the date on which the Administrator makes the determination  granting
such Option,  or such other later date as is  determined  by the  Administrator.
Notice  of the  determination  shall  be  provided  to each  Optionee  within  a
reasonable time after the date of such grant.

         14. Amendment and Termination of the Plan.

                  (a)  Amendment  and  Termination.  The  Board  may at any time
amend, alter, suspend or terminate the Plan.

                  (b) Shareholder Approval. The Company shall obtain shareholder
approval of any Plan  amendment to the extent  necessary and desirable to comply
with Applicable Laws.

                  (c)  Effect  of  Amendment  or   Termination.   No  amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee,  unless  mutually  agreed  otherwise  between  the  Optionee  and  the
Administrator, which Agreement must be in writing and signed by the Optionee and


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the  Company.  Termination  of the Plan  shall not  affect  the  Administrator's
ability to exercise the powers  granted to it hereunder  with respect to options
granted under the Plan prior to the date of such termination.

         15. Conditions Upon Issuance of Shares.

                  (a) Legal  Compliance.  Shares shall not be issued pursuant to
the  exercise of an Option  unless the  exercise of such Option and the issuance
and  delivery of such Shares  shall  comply  with  Applicable  Laws and shall be
further  subject to the approval of counsel for the Company with respect to such
compliance.

                  (b) Investment Representations. 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.

         16.  Inability  to Obtain  Authority.  The  inability of the Company to
obtain authority from any regulatory body having  jurisdiction,  which authority
is deemed by the  Company's  counsel to be necessary to the lawful  issuance and
sale of any Shares  hereunder,  shall  relieve the Company of any  liability  in
respect of the failure to issue or sell such  Shares as to which such  requisite
authority shall not have been obtained.

         17. Reservation of Shares.  The Company,  during the term of this Plan,
will at all times reserve and keep  available  such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

         18. Shareholder Approval.  The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such  shareholder  approval shall be obtained in the manner and to the
degree required under Applicable Laws.


                                      -10-
<PAGE>




                             PINNACLE SYSTEMS, INC.

                             1996 STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

         Unless  otherwise  defined herein,  the terms defined in the 1996 Stock
Option Plan (the  "Plan")  shall have the same  defined  meanings in this Option
Agreement.

I.       NOTICE OF STOCK OPTION GRANT

[Optionee's Name and Address]

         You have  been  granted  an  option  to  purchase  Common  Stock of the
Company,  subject  to the  terms  and  conditions  of the Plan  and this  Option
Agreement, as follows:

         Grant Number                            _________________________

         Date of Grant                           _________________________

         Vesting Commencement Date               _________________________

         Exercise Price per Share                $________________________

         Total Number of Shares Granted          _________________________

         Total Exercise Price                    $________________________

         Type of Option:                         ___ Incentive Stock Option

                                                 ___ Nonstatutory Stock Option

         Term/Expiration Date:                   _________________________

Vesting Schedule:

         This Option may be exercised,  in whole or in part, in accordance  with
the following schedule:

         [25% of the Shares subject to the Option shall vest twelve months after
the  Vesting  Commencement  Date,  and 1/48 of the Shares  subject to the Option
shall vest each month  thereafter,  subject to the Optionee  continuing  to be a
Service Provider on such dates].

         Termination Period:

         This Option may be exercised  for _____  [days/months]  after  Optionee
ceases to be a Service  Provider.  Upon the death or Disability of the Optionee,
this Option may be exercised  for such longer period as provided in the Plan. In
no event shall this Option be exercised later than the  Term/Expiration  Date as
provided above.


                                      -11-
<PAGE>


II.      AGREEMENT

1. Grant of Option.  The Plan  Administrator of the Company hereby grants to the
Optionee  named in the Notice of Grant attached as Part I of this Agreement (the
"Optionee")  an option (the  "Option") to purchase the number of Shares,  as set
forth in the Notice of Grant,  at the exercise  price per share set forth in the
Notice of Grant (the "Exercise  Price"),  subject to the terms and conditions of
the Plan, which is incorporated herein by reference. Subject to Section 14(c) of
the Plan,  in the event of a conflict  between the terms and  conditions  of the
Plan and the  terms  and  conditions  of this  Option  Agreement,  the terms and
conditions of the Plan shall prevail.

                  If  designated  in the Notice of Grant as an  Incentive  Stock
Option ("ISO"),  this Option is intended to qualify as an Incentive Stock Option
under  Section  422 of the Code.  However,  if this  Option is intended to be an
Incentive Stock Option,  to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

2.       Exercise of Option.

                  (a) Right to Exercise.  This Option is exercisable  during its
term in accordance with the Vesting  Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement.

                  (b) Method of Exercise. This Option is exercisable by delivery
of an  exercise  notice,  in the  form  attached  as  Exhibit  A (the  "Exercise
Notice"),  which shall state the election to exercise the Option,  the number of
Shares  in  respect  of which  the  Option is being  exercised  (the  "Exercised
Shares"),  and such other  representations  and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
completed  by the Optionee and  delivered  to the Company.  The Exercise  Notice
shall be  accompanied  by  payment  of the  aggregate  Exercise  Price as to all
Exercised  Shares.  This Option shall be deemed to be exercised  upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

                  No Shares  shall be issued  pursuant  to the  exercise of this
Option unless such issuance and exercise complies with Applicable Laws. Assuming
such  compliance,  for  income  tax  purposes  the  Exercised  Shares  shall  be
considered  transferred to the Optionee on the date the Option is exercised with
respect to such Exercised Shares.

3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of
the following,  or a combination  thereof, at the election of the Optionee:

                  (a) cash; or

                  (b) check; or

                  (c)  consideration  received by the  Company  under a cashless
exercise program implemented by the Company in connection with the Plan; or

                  (d)  surrender of other Shares which (i) in the case of Shares
acquired  upon  exercise of an option,  have been owned by the Optionee for more
than six (6) months on the date of surrender,  and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate  Exercise Price of the Exercised
Shares.


                                      -12-
<PAGE>


         4. Non-Transferability of Option. This Option may not be transferred in
any manner  otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this  Option  Agreement  shall be  binding  upon the  executors,
administrators, heirs, successors and assigns of the Optionee.

         5. Term of Option.  This Option may be  exercised  only within the term
set out in the Notice of Grant,  and may be  exercised  during such term only in
accordance with the Plan and the terms of this Option Agreement.

         6. Tax Consequences.  Some of the federal tax consequences  relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE,  AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE  OPTIONEE  SHOULD  CONSULT A TAX ADVISER  BEFORE  EXERCISING  THIS OPTION OR
DISPOSING OF THE SHARES.

                  (a) Exercising the Option.

                           (i) Nonstatutory Stock Option. The Optionee may incur
regular  federal  income tax liability upon exercise of a NSO. The Optionee will
be treated as having  received  compensation  income (taxable at ordinary income
tax  rates)  equal  to the  excess,  if any,  of the  Fair  Market  Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price. If
the Optionee is an Employee or a former  Employee,  the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the
applicable  taxing  authorities  an amount in cash equal to a percentage of this
compensation  income  at the time of  exercise,  and may  refuse  to  honor  the
exercise  and  refuse to  deliver  Shares if such  withholding  amounts  are not
delivered at the time of exercise.

                           (ii) Incentive Stock Option. If this Option qualifies
as an ISO, the Optionee will have no regular  federal  income tax liability upon
its  exercise,  although  the excess,  if any,  of the Fair Market  Value of the
Exercised  Shares on the date of exercise over their  aggregate  Exercise  Price
will be treated as an  adjustment  to  alternative  minimum  taxable  income for
federal tax purposes and may subject the Optionee to alternative  minimum tax in
the year of exercise.  In the event that the  Optionee  ceases to be an Employee
but remains a Service Provider,  any Incentive Stock Option of the Optionee that
remains unexercised shall cease to qualify as an Incentive Stock Option and will
be treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.

                  (b) Disposition of Shares.

                           (i) NSO.  If the  Optionee  holds NSO  Shares  for at
least one year,  any gain realized on  disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes.

                           (ii) ISO.  If the  Optionee  holds ISO  Shares for at
least one year  after  exercise  and two years  after the grant  date,  any gain
realized on disposition of the Shares will be treated as long-term  capital gain
for federal income tax purposes.  If the Optionee  disposes of ISO Shares within
one year after  exercise or two years after the grant date, any gain realized on
such  disposition  will be treated as  compensation  income (taxable at ordinary
income  rates) to the  extent of the  excess,  if any,  of the lesser of (A) the
difference  between the Fair Market Value of the Shares  acquired on the date of
exercise and the aggregate  Exercise  Price,  or (B) the difference  between the
sale price of such Shares and the aggregate  Exercise Price. Any additional gain
will be taxed as capital gain,  short-term or long-term  depending on the period
that the ISO Shares were held.


                                      -13-
<PAGE>


                  (c) Notice of Disqualifying  Disposition of ISO Shares. If the
Optionee sells or otherwise  disposes of any of the Shares acquired  pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately  notify the Company
in  writing  of such  disposition.  The  Optionee  agrees  that he or she may be
subject to income tax  withholding  by the  Company on the  compensation  income
recognized  from such early  disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

         7. Entire Agreement;  Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire Agreement of
the parties with  respect to the subject  matter  hereof and  supersede in their
entirety all prior  undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof,  and may not be modified  adversely to the
Optionee's  interest  except by means of a writing  signed  by the  Company  and
Optionee.  This Agreement is governed by the internal  substantive laws, but not
the choice of law rules, of [state].

         8. NO GUARANTEE OF CONTINUED SERVICE.  OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES  PURSUANT TO THE  VESTING  SCHEDULE  HEREOF IS EARNED
ONLY BY  CONTINUING  AS A SERVICE  PROVIDER AT THE WILL OF THE COMPANY  (AND NOT
THROUGH THE ACT OF BEING HIRED,  BEING  GRANTED AN OPTION OR  PURCHASING  SHARES
HEREUNDER).  OPTIONEE FURTHER  ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT,  THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT  CONSTITUTE  AN EXPRESS OR IMPLIED  PROMISE  OF  CONTINUED  ENGAGEMENT  AS A
SERVICE  PROVIDER FOR THE VESTING PERIOD,  FOR ANY PERIOD,  OR AT ALL, AND SHALL
NOT  INTERFERE  WITH  OPTIONEE'S  RIGHT  OR THE  COMPANY'S  RIGHT  TO  TERMINATE
OPTIONEE'S  RELATIONSHIP  AS A SERVICE  PROVIDER  AT ANY TIME,  WITH OR  WITHOUT
CAUSE.

         By your  signature and the  signature of the  Company's  representative
below,  you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement.  Optionee has
reviewed  the Plan and  this  Option  Agreement  in their  entirety,  has had an
opportunity  to obtain the  advice of counsel  prior to  executing  this  Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding,  conclusive and final all decisions
or  interpretations of the Administrator upon any questions relating to the Plan
and Option  Agreement.  Optionee  further  agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE:                                   PINNACLE SYSTEMS, INC.

------------------------------------        ------------------------------------
Signature                                   By

------------------------------------        ------------------------------------
Print Name                                  Title

------------------------------------        ------------------------------------
Residence                                   Address

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


                                      -14-
<PAGE>

                                CONSENT OF SPOUSE

         The  undersigned  spouse of Optionee  has read and hereby  approves the
terms and conditions of the Plan and this Option Agreement.  In consideration of
the  Company's  granting  his or her spouse the right to purchase  Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably  bound by the  terms  and  conditions  of the  Plan and this  Option
Agreement  and further  agrees that any  community  property  interest  shall be
similarly bound.  The undersigned  hereby appoints the  undersigned's  spouse as
attorney-in-fact  for the undersigned  with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.


                                                       -------------------------
                                                       Spouse of Optionee


<PAGE>

                                    EXHIBIT A

                             PINNACLE SYSTEMS, INC.

                             1996 STOCK OPTION PLAN

                                 EXERCISE NOTICE

Pinnacle Systems, Inc.
280 N. Bernardo Avenue
Mountain View, CA 94043

Attention Secretary:

         1. Exercise of Option. Effective as of today, ________________,  _____,
the undersigned  ("Purchaser") hereby elects to purchase  ______________  shares
(the  "Shares") of the Common Stock of Pinnacle  Systems,  Inc. (the  "Company")
under and  pursuant  to the 1996 Stock  Option  Plan (the  "Plan") and the Stock
Option Agreement dated, _____ (the "Option  Agreement").  The purchase price for
the Shares shall be $, as required by the Option Agreement.

         2. Delivery of Payment.  Purchaser herewith delivers to the Company the
full purchase price for the Shares.

         3. Representations of Purchaser.  Purchaser acknowledges that Purchaser
has received,  read and understood the Plan and the Option  Agreement and agrees
to abide by and be bound by their terms and conditions.

         4. Rights as  Shareholder.  Until the  issuance  (as  evidenced  by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the  Company) of the Shares,  no right to vote or receive  dividends or
any other  rights as a  shareholder  shall  exist with  respect to the  Optioned
Stock,  notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as  practicable  after exercise of the Option.
No  adjustment  will be made for a dividend  or other right for which the record
date is prior to the date of  issuance,  except as provided in Section 12 of the
Plan.

         5. Tax  Consultation.  Purchaser  understands that Purchaser may suffer
adverse tax  consequences as a result of Purchaser's  purchase or disposition of
the Shares.  Purchaser  represents  that  Purchaser has  consulted  with any tax
consultants  Purchaser  deems  advisable  in  connection  with the  purchase  or
disposition  of the Shares and that  Purchaser is not relying on the Company for
any tax advice.

         6. Entire  Agreement;  Governing Law. The Plan and Option Agreement are
incorporated  herein  by  reference.  This  Agreement,  the Plan and the  Option
Agreement  constitute  the entire  Agreement  of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements  of the  Company and  Purchaser  with  respect to the subject  matter
hereof, and may not be modified adversely to the Purchaser's  interest except by
means of a writing  signed by the  Company  and  Purchaser.  This  Agreement  is
governed by the internal  substantive  laws, but not the choice of law rules, of
[state].


<PAGE>



Submitted by:                             Accepted by:

PURCHASER:                                PINNACLE SYSTEMS, INC.


----------------------------------        --------------------------------------
Signature                                 By


----------------------------------        --------------------------------------
Print Name                                Title


                                          --------------------------------------
                                          Date Received

Address:                                  Address:
-------                                   -------

__________________________________        280 N. Bernardo Avenue

                                          Mountain View, CA 94043


                                       -2-