As filed with the Securities and Exchange Commission on November __, 2000
Registration No. 333-42776
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
PINNACLE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
---------------
California 94-3003809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
280 North Bernardo Ave.
Mountain View, California 94043
(650) 526-1600
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
---------------
Arthur D. Chadwick
Vice President, Finance and Administration,
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:
Paul J. Hartnett, Jr., Esq.
Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, MA 02111
(617) 856-8200
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
<PAGE>
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
===================================================================================================================
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Securities to be Offering Price Aggregate Offering Registration
to be Registered (2) Registered Per Share (1) Price (1) Fee (3)
--------------------------------- -------------------- ------------------ -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 944,213 shares $7.6406 $7,214,353.85 $1,904.59
===================================================================================================================
<FN>
(1) Estimated solely for the purpose of computing the amount of the
registration fee. The estimate is made pursuant to Rule 457(c) of the
Securities Act of 1933, as amended, based on the average of the high and
low prices on July 28, 2000.
(2) Includes Preferred Share Purchase Rights, which, prior to the occurrence of
certain events, will not be exercisable or evidenced separately from the
Common Stock.
(3) Registration Fee previously paid.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS BEEN FILED AND IS DECLARED EFFECTIVE BY THE SECURITIES AND
EXCHANGE COMMISSION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE IN WHICH
THE OFFER OR SALE IS NOT PERMITTED.
2
<PAGE>
PROSPECTUS (SUBJECT TO COMPLETION)
Dated November 20, 2000
PINNACLE SYSTEMS, INC.
944,213 Shares
COMMON STOCK
---------------
These shares may be offered and sold from time to time by certain shareholders
of Pinnacle Systems, Inc., a California corporation ("Pinnacle" or the
"Registrant") identified in this prospectus. See "Selling Shareholders." The
selling shareholders acquired the shares in connection with the acquisition by
Pinnacle of Avid Sports, Inc.
The selling shareholders will receive all of the net proceeds from the sale of
the shares and will pay all underwriting discounts and selling commissions, if
any, applicable to the sale of the shares. Pinnacle will not receive any of the
proceeds from the sale of the shares.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 5 OF THIS
PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
Pinnacle's common stock is traded on the Nasdaq National Market under the symbol
"PCLE." On November 17, 2000, the last sale price of a share of our common stock
was $10.375.
---------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------
November ____, 2000.
3
<PAGE>
TABLE OF CONTENTS
Where to Find Additional Information About Pinnacle 4
Information Incorporated by Reference.................................. 4
Forward Looking Information............................................ 5
Summary Business Description of Pinnacle............................... 5
Risk Factors........................................................... 5
Use of Proceeds........................................................ 11
Selling Shareholders................................................... 11
Plan of Distribution................................................... 14
Experts................................................................ 14
Legal Matters.......................................................... 15
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The selling shareholders are offering to sell, and
seeking offers to buy, shares of Pinnacle common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of the shares.
In this prospectus, "Pinnacle," "we," "us," and "our" refer to Pinnacle and its
subsidiaries.
WHERE TO FIND ADDITIONAL INFORMATION ABOUT PINNACLE
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission, referred to as the SEC.
You may read and copy any document we file at the SEC's public reference
facilities in Room 1034, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the SEC's regional offices at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be a part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below, and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, until the selling shareholders sell all the shares. The documents we
incorporate by reference are:
(1) Our Quarterly Report on Form 10-Q for the fiscal period ended September 30,
2000, filed November 14, 2000 pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "1934 Act");
(2) Our Annual Report on Form 10-K for the fiscal year ended June 30, 2000,
filed September 28, 2000 pursuant to the 1934 Act;
(3) Our Current Report on Form 8-K filed July 14, 2000, relating to our
acquisition of Avid Sports, Inc.;
(4) Our Current Report on Form 8-K filed July 27, 2000, relating to (i) our
announcement of preliminary sales and earnings for the fourth quarter of Fiscal
2000, (ii) our announcement that we were denying allegations in a lawsuit, and
(iii) our announcement of financial results for the fourth quarter of Fiscal
2000;
(5) The description of our common stock contained in our Registration Statement
on Form 8-A filed with the Commission on September 9, 1994; and
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<PAGE>
(6) The description of our Preferred Share Purchase Rights contained in our
Registration Statement on Form 8-A as filed with the Commission on December 19,
1996, as amended May 19, 1998.
You may request a copy of these filings, at no cost, by written or oral request
to the following address: Chief Financial Officer, Pinnacle Systems, Inc., 280
North Bernardo Avenue, Mountain View, California 94043; telephone number (650)
526-1600.
FORWARD LOOKING INFORMATION
This Prospectus, including the information incorporated by reference herein,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934. Actual results could differ materially from
those projected in the forward-looking statements as a result of the risk
factors set forth below. Reference is made in particular to the discussion set
forth under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report on Form 10-K for the fiscal year
ended June 30, 1999, incorporated herein by reference. In connection with
forward-looking statements that appear in these disclosures, prospective
purchasers of the common stock offered hereby should carefully consider the
factors set forth in this Prospectus under "Risk Factors."
SUMMARY BUSINESS DESCRIPTION OF PINNACLE
We design, manufacture, market and support video post-production tools for high
quality real time video processing. Our products combine computer based and
specialized video processing technologies which perform a variety of video
post-production functions such as the addition of special effects, graphics and
titles to multiple streams of live or previously recorded video material. We
have sold over 10,000 post-production systems since our inception in 1986 to
customers in more than 60 countries. Our products address needs in the
broadcast, desktop and consumer video post-production markets.
We were incorporated in California in 1986. We maintain our executive offices at
280 North Bernardo Avenue, Mountain View, California 94043, and our telephone
number is (650) 526-1600.
RISK FACTORS
|X| There are various factors which may cause our net revenues and operating
results to fluctuate.
Our quarterly and annual operating results have varied significantly in the past
and may continue to fluctuate because of a number of factors, many of which are
outside our control. These factors include:
- Increased competition and pricing pressure
- Timing of significant orders from and shipments to major customers,
including OEM's and our large broadcast accounts.
- Timing and market acceptance of new products
- Success in developing, introducing and shipping new products
- Dependence on distribution channels through which our products are
sold
- Accuracy of our and our resellers' forecasts of end-user demand
- Accuracy of inventory forecasts
- Ability to obtain sufficient supplies from our subcontractors
- Timing and level of consumer product returns
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<PAGE>
- Foreign currency fluctuations
- Costs of integrating acquired operations
- General domestic and international economic conditions, such as the
recent economic downturns in Asia and Latin America
We also experience significant fluctuations in orders and sales due to seasonal
fluctuations, the timing of major trade shows and the sale of consumer products
in anticipation of the holiday season. Sales usually slow down during the summer
months of July and August, especially in Europe. Also, we attend a number of
annual trade shows which can influence the order pattern of products, including
CEBIT in March, the NAB convention held in April and the IBC convention held in
September. Our operating expense levels are based, in part, on our expectations
of future revenue and, as a result, net income would be disproportionately
affected by a shortfall in net sales. Due to these factors, we believe that
quarter-to-quarter comparisons of our results of operations are not necessarily
meaningful and should not be relied upon as indicators of future performance.
|X| We are dependent on contract manufacturers and single or limited source
suppliers for our components. If these manufacturers and suppliers do not meet
our demand either in volume or quality, then we could be materially harmed.
We rely on subcontractors to manufacture our desktop and consumer products and
the major subassemblies of our broadcast products. We and our manufacturing
subcontractors are dependent upon single or limited source suppliers for a
number of components and parts used in our products, including certain key
integrated circuits. Our strategy to rely on subcontractors and single or
limited source suppliers involves a number of significant risks, including:
- Loss of control over the manufacturing process
- Potential absence of adequate capacity
- Potential delays in lead times
- Unavailability of certain process technologies
- Reduced control over delivery schedules, manufacturing yields,
quality and costs
- Unexpected increases in component costs
If any significant subcontractor or single or limited source supplier becomes
unable or unwilling to continue to manufacture these subassemblies or provide
critical components in required volumes, we will have to identify and qualify
acceptable replacements or redesign our products with different components.
Additional sources may not be available and product redesign may not be feasible
on a timely basis. This could materially harm our business. Any extended
interruption in the supply of or increase in the cost of the products,
subassemblies or components manufactured by third party subcontractors or
suppliers could materially harm our business.
|X| We must retain key employees to remain competitive.
If certain of our key employees leave or are no longer able to perform services
for us, it could have a material adverse effect on our business. We may not be
able to attract and retain a sufficient number of managerial personnel and
technical employees to compete successfully. We believe that the efforts and
abilities of our senior management and key technical personnel are very
important to our continued success. Our success is dependent upon our ability to
attract and retain qualified technical and managerial personnel. There are not
enough engineers, technical support, software services and managers available to
meet the current demands of the computer industry. We may not be able to retain
our key technical and managerial employees or attract, assimilate and retain
such other highly qualified technical and managerial personnel as are required
in the future. Also, employees may leave our employ and
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<PAGE>
subsequently compete against us, or contractors may perform services for
competitors of ours. If we are unable to retain key personnel, our business
could be materially harmed.
|X| We have grown rapidly and expect to continue to grow rapidly. If we fail to
effectively manage this growth, our financial results could suffer.
We have experienced rapid growth and anticipate that we will continue to grow at
a rapid pace in the future. For example, net sales in fiscal 2000 were $238.0
million compared to $159.1 million in fiscal 1999, a 49.6% increase. In the
three month period ended September 30, 2000, net sales increased 24.4% over the
same period last year. As a result of internal growth and recent acquisitions,
we have increased the number of employees significantly over the last two fiscal
years and many are geographically dispersed, primarily throughout North America
and Europe. This growth places increasing demands on our management, financial
and other resources. We have built resources and systems to account for such
growth, but continued or accelerated growth may require us to increase our
investment in such systems, or to reorganize our management team. Such changes,
should they occur, could cause an interruption or diversion of focus from our
core business activities and have an adverse effect on financial results.
|X| Any failure to successfully integrate the businesses we have acquired could
negatively impact us.
In June 2000, we acquired Avid Sports, Inc. and Propel Ahead, Inc., and in April
2000, we acquired Montage Group, Ltd. In January 2000, we acquired Synergy, Inc.
In March 2000, we acquired Digital Editing Services, Inc. and Puffin Designs,
Inc. Also, in 1999, we acquired the Video Communications Division of the
Hewlett-Packard Company, Truevision, Inc. and Shoreline Studios, Inc. We may in
the near- or long-term pursue additional acquisitions of complementary
businesses, products or technologies. Integrating acquired operations is a
complex, time-consuming and potentially expensive process. All acquisitions
involve risks that could materially and adversely affect our business and
operating results. These risks include:
- Distracting management from the day-to-day operations of our
business
- Costs, delays and inefficiencies associated with integrating
acquired operations, products and personnel
- The potential to result in dilutive issuance of our equity
securities
- Incurring debt and amortization expenses related to goodwill and
other intangible assets
|X| Our stock price may be volatile.
The trading price of our common stock has in the past and could in the future
fluctuate significantly. The fluctuations have been or could be in response to
numerous factors including:
- Quarterly variations in results of operations
- Announcements of technological innovations or new products by us,
our customers or competitors
- Changes in securities analysts' recommendations
- Announcements of acquisitions
- Changes in earnings estimates made by independent analysts
- General fluctuations in the stock market
Our revenues and results of operations may be below the expectations of public
market securities analysts or investors. This could result in a sharp decline in
the market price of our common stock. In July 2000, we announced that financial
results for the fourth quarter of fiscal 2000, which ended June 30, 2000, would
be lower than the then current analyst consensus estimates regarding Pinnacle's
quarterly results. In the day following this announcement,
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<PAGE>
our share price lost more than 59% of its value and our shares continue to trade
in a price range significantly lower than the range held by our shares before
this announcement.
With the advent of the Internet, new avenues have been created for the
dissemination of information. Pinnacle has no control over the information that
is distributed and discussed on electronic bulletin boards and investment chat
rooms. The motives of the people or organizations that distribute such
information may not be in the best interest of Pinnacle and its shareholders.
This, in addition to other forms of investment information including newsletters
and research publications, could result in a sharp decline in the market price
of our common stock.
In addition, stock markets have from time to time experienced extreme price and
volume fluctuations. The market prices for high technology companies have been
particularly affected by these market fluctuations and such effects have often
been unrelated to the operating performance of such companies. These broad
market fluctuations may cause a decline in the market price of our common stock.
In the past, following periods of volatility in the market price of a company's
stock, securities class action litigation has been brought against the issuing
company. On July 18, 2000, a lawsuit entitled Jiminez v. Pinnacle Systems, Inc.,
et al., No. 00-CV-2596 was filed in the United States District Court for the
Northern District of California against Pinnacle and certain officer and
director defendants.
We have publicly announced that we intend to defend the case vigorously. It is
possible that additional similar litigation could be brought against us in the
future. The securities class action lawsuit described above and any similar
litigation which may be brought against Pinnacle could result in substantial
costs and will likely divert management's attention and resources. Any adverse
determination in such litigation could also subject us to significant
liabilities.
|X| If our products do not keep pace with the technological developments in the
rapidly changing video post-production equipment industry, then we may be
adversely affected.
The video post-production equipment industry is characterized by rapidly
changing technology, evolving industry standards and frequent new product
introductions. The introduction of products embodying new technologies or the
emergence of new industry standards can render existing products obsolete or
unmarketable. Delays in the introduction or shipment of new or enhanced
products, our inability to timely develop and introduce such new products, the
failure of such products to gain significant market acceptance or problems
associated with new product transitions could materially harm our business,
particularly on a quarterly basis.
We are critically dependent on the successful introduction, market acceptance,
manufacture and sale of new products that offer our customers additional
features and enhanced performance at competitive prices. Once a new product is
developed, we must rapidly commence volume production. This process requires
accurate forecasting of customer requirements and attainment of acceptable
manufacturing costs. The introduction of new or enhanced products also requires
us to manage the transition from older, displaced products in order to minimize
disruption in customer ordering patterns, avoid excessive levels of older
product inventories and ensure that adequate supplies of new products can be
delivered to meet customer demand. In addition, as is typical with any new
product introduction, quality and reliability problems may arise. Any such
problems could result in reduced bookings, manufacturing rework costs, delays in
collecting accounts receivable, additional service warranty costs and a
limitation on market acceptance of the product.
|X| If we do not effectively compete, our business will be harmed.
The market for our products is highly competitive. We compete in the broadcast,
desktop and consumer video production markets. We anticipate increased
competition in each of the broadcast, desktop and consumer video production
markets, particularly since the industry is undergoing a period of technological
change and consolidation. Competition for our broadcast, consumer and video
products is generally based on:
- Product performance
- Breadth of product line
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<PAGE>
- Quality of service and support
- Market presence
- Price
- Ability of competitors to develop new, higher performance, lower
cost consumer video products
Certain competitors in the broadcast, desktop and consumer video markets have
larger financial, technical, marketing, sales and customer support resources,
greater name recognition and larger installed customer bases than we do. In
addition, some competitors have established relationships with current and
potential customers of ours and offer a wide variety of video equipment that can
be bundled in certain large system sales.
Principal competitors in the broadcast market include:
Accom, Inc.
Chyron Corporation
Grass Valley Group
Leitch Technology Corporation
Matsushita Electric Industrial Co. Ltd.
Quantel Ltd. (a division of Carlton Communications Plc)
SeaChange Corporation
Sony Corporation
Tektronix, Inc.
Principal competitors in the desktop and consumer markets are:
Accom, Inc.
Adobe Systems, Inc.
Apple Computer
Avid Technology, Inc.
Dazzle Multimedia
Digitel Processing Systems, Inc.
Fast Multimedia
Hauppauge Digital, Inc.
Matrox Electronics Systems, Ltd.
Media 100, Inc.
Sony Corporation
These lists are not all-inclusive.
The consumer market in which certain of our products compete is an emerging
market and the sources of competition are not yet well defined. There are
several established video companies that are currently offering products or
solutions that compete directly or indirectly with our consumer products by
providing some or all of the same features and video editing capabilities. In
addition, we expect that existing manufacturers and new market entrants will
develop new, higher performance, lower cost consumer video products that may
compete directly with our consumer products. We expect that potential
competition in this market is likely to come from existing video editing
companies, software application companies, or new entrants into the market, many
of which have the financial resources, marketing and technical ability to
develop products for the consumer video market. Increased competition in any of
these markets could result in price reductions, reduced margins and loss of
market share. Any of these effects could materially harm our business.
We rely heavily on dealers and OEMs to market, sell and distribute our products.
In turn, we depend heavily on the success of these resellers. If these resellers
do not succeed in effectively distributing our products, then our financial
performance will be negatively affected.
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<PAGE>
These resellers may not effectively promote or market our products or they may
experience financial difficulties and even close operations. Our dealers and
retailers are not contractually obligated to sell our products. Therefore, they
may, at any time:
- Refuse to promote or pay for our products
- Discontinue our products in favor of a competitor's product
Also, with these distribution channels standing between us and the actual
market, we may not be able to accurately gauge current demand for products and
anticipate demand for newly introduced products. For example, dealers may place
large initial orders for a new product just to keep their stores stocked with
the newest products and not because there is a significant demand for them.
As to consumer products offerings, we have expanded our distribution network to
include several consumer channels, including large distributors of products to
computer software and hardware retailers, which in turn sell products to end
users. We also sell our consumer products directly to certain retailers. Rapid
change and financial difficulties of distributors have characterized
distribution channels for consumer retail products. These arrangements have
exposed us to the following risks, some of which are out of our control:
- We are obligated to provide price protection to such retailers and
distributors and, while the agreements limit the conditions under which product
can be returned to us, we may be faced with product returns or price protection
obligations
- The distributors or retailers may not continue to stock and sell our
consumer products.
- Retailers and retail distributors often carry competing products
|X| We may be unable to protect our proprietary information and procedures
effectively.
We must protect our proprietary technology and operate without infringing the
intellectual property rights of others. We rely on a combination of patent,
copyright, trademark and trade secret laws and other intellectual property
protection methods to protect our proprietary technology. In addition, we
generally enter into confidentiality and nondisclosure agreements with our
employees and OEM customers and limit access to and distribution of our
proprietary technology. These steps may not protect our proprietary information
nor give us any competitive advantage. Others may independently develop
substantially equivalent intellectual property or otherwise gain access to our
trade secrets or intellectual property, or disclose such intellectual property
or trade secrets. If we are unable to protect our intellectual property, our
business could be materially harmed.
|X| We may be adversely affected if we are sued by a third party or if we decide
to sue a third party.
There has been substantial litigation regarding patent, trademark and other
intellectual property rights involving technology companies. In the future,
litigation may be necessary to enforce any patents issued to us, to protect our
trade secrets, trademarks and other intellectual property rights owned by us, or
to defend us against claimed infringement. We are also exposed to litigation
arising from disputes in the ordinary course of business. This litigation may:
- Divert management's attention away from the operation of our
business
- Result in the loss of our proprietary rights
- Subject us to significant liabilities
- Force us to seek licenses from third parties
- Prevent us from manufacturing or selling products
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Any of these results could materially harm our business.
In the course of business, we have in the past received communications asserting
that our products infringe patents or other intellectual property rights of
third parties. We investigated the factual basis of such communications and
negotiated licenses where appropriate. It is likely that in the course of our
business, we will receive similar communications in the future. While it may be
necessary or desirable in the future to obtain licenses relating to one or more
of our products, or relating to current or future technologies, we may not be
able to do so on commercially reasonable terms, or at all. These disputes may
not be settled on commercially reasonable terms and may result in long and
costly litigation.
|X| Because we sell products internationally, we are subject to additional
risks.
Sales of our products outside of North America represented approximately 55% of
net sales in the period ended June 30, 2000 and 61% of net sales in the year
ended June 30, 1999. We expect that international sales will continue to
represent a significant portion of our net sales. We make foreign currency
denominated sales in many, primarily European, countries. This exposes us to
risks associated with currency exchange fluctuations. In fiscal 2001 and beyond,
we expect that a majority of our European sales will continue to be denominated
in local foreign currency, including the Euro. Pinnacle has developed natural
hedges for some of this risk in that most of the European operating expenses are
also denominated in local currency.
In addition to foreign currency risks, international sales and operations may
also be subject to the following risks:
- Unexpected changes in regulatory requirements
- Export license requirements
- Restrictions on the export of critical technology
- Political instability
- Trade restrictions
- Changes in tariffs
- Difficulties in staffing and managing international operations
- Potential insolvency of international dealers and difficulty in
collecting accounts
We are also subject to the risks of generally poor economic conditions in
certain areas of the world, most notably Asia. These risks may harm our future
international sales and, consequently, our business.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
shareholders. All proceeds from the sale of our common stock will go to the
shareholders who offer and sell their shares.
SELLING SHAREHOLDERS
The following table sets forth information with respect to the number of shares
of common stock owned by the selling shareholders named below and as adjusted to
give effect to the sale of the shares offered hereby. The information in the
table below is current as of the date of this prospectus. The shares are being
registered to permit public secondary trading of the shares, and the selling
shareholders may offer the shares for resale from time to time.
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The shares being offered by the selling shareholders were acquired in connection
with our acquisition of Avid Sports, Inc. In the acquisition, the shares of
common stock were issued pursuant to an exemption from the registration
requirements of the Securities Act. In connection with the acquisition, we
agreed to register certain shares of our common stock received by the former
shareholders of Avid Sports, Inc. on the registration statement of which this
prospectus is part. None of the selling shareholders owns more than 1% of our
outstanding common stock. An asterisk (*) following a particular shareholder's
name indicates that the shareholder is an employee of Avid Sports, Inc., a
wholly-owned subsidiary of ours.
Shares of common stock subject to options are treated as outstanding and as
beneficially owned by the person holding such options in accordance with Section
13 of the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, for the purpose of computing the percentage ownership of
the person and are listed below under the "Number of Shares Underlying Options"
column below, but these options are not treated as outstanding for the purpose
of computing the percentage ownership of any other person.
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<TABLE>
The shares offered by this prospectus may be offered from time to time by the
selling shareholders named below:
<CAPTION>
Number of Shares Number of Shares
Name of Selling Beneficially Owned Prior Number of Shares Number of Shares Beneficially Owned
Shareholder to the Offering Being Offered Underlying Options After the Offering
-------------------------- --------------------------- ----------------------- ---------------------- ------------------------
<S> <C> <C> <C> <C>
Aeder, Karl 8,125 8,125 0 0
Avid Technology 232,122 232,122 0 0
Barkley, John * 134,631 134,631 0 0
Bennett, Jennifer * 1,606 774 532 832
Bienvenu, Mark 6,268 6,268 0 0
Carpenter, Jeffrey * 4,701 4,643 58 58
Clark, Mark 774 774 0 0
Colony Investments 1,730 1,730 0 0
Connell, Michael * 1,306 774 532 532
Dapkus, Karen 12,523 10,523 0 2,000
Eccker, Randy 9,285 9,285 0 0
Fay, Eugene 4,643 4,643 0 0
Grandin, David 159,390 159,390 0 0
Intel Corporation 103,742 103,742 0 0
Keshian, Daniel 11,607 11,607 0 0
Lamaa, Fady 3,869 3,869 0 0
Maira, Ravi 465 465 0 0
Menon, Krishna * 21,956 19,344 2,262 2,612
Moniz, Michael 6,964 6,964 0 0
Morrison, William 774 774 0 0
Murphy, David 7,738 7,738 0 0
Quinn, Steven 2,391 2,391 0 0
Racicot, Andrew 2,580 2,580 0 0
Rhinehart, Craig 8,357 8,357 0 0
Sauer, David 39 39 0 0
Simmons, Robert 131,536 131,536 0 0
Thomas, Alton * 4,744 4,643 101 101
Thompson, Raymond * 8,803 7,738 1,065 1,065
Vint, Frederick 833 833 0 0
Walsh, John, Jr. 15,475 15,475 0 0
Williams 34,581 34,581 0 0
Communications
Wilson, David * 8,803 7,738 1,065 1,065
Xifaras, George 117 117 0 0
</TABLE>
Pursuant to the terms of the Stock Acquisition and Exchange Agreement dated as
of June 29, 2000 (the "Agreement"), between Pinnacle, the selling shareholders,
Avid Sports, Inc., Brendan Corp., and David Grandin as Stockholders'
Representative, Pinnacle undertook to use commercially reasonable efforts to
register certain of the shares held by the selling shareholders within 30 days
of the date of issuance of shares in connection with the closing of the
acquisition. The Agreement also includes certain indemnification arrangements
with the selling shareholders.
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<PAGE>
PLAN OF DISTRIBUTION
The shares may be sold from time to time by the selling shareholders or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made in any one or more transactions (which may involve block transactions) on
the Nasdaq National Market, or any exchange on which the common stock of
Pinnacle may then be listed, in the over-the-counter market or otherwise in
negotiated transactions or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The selling shareholders may effect such
transactions by selling shares to or through broker-dealers, and such
broker-dealers may sell the shares as agent or may purchase such shares as
principal and resell them for their own account pursuant to this prospectus.
Such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the selling shareholders and/or
purchasers the shares, for whom they may act as agent (which compensation may be
in excess of customary commissions).
The aggregate proceeds to the selling shareholders from the sale of the shares
will be the purchase price of the common stock sold less the aggregate agents'
commissions if any, and other expenses of issuance and distribution not borne by
Pinnacle. The selling shareholders and any dealers or agents that participate in
the distribution of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the shares by them
and any commissions received by any such dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
To the extent required, the specific shares of common stock to be sold, the
names of the selling shareholders, purchase price, public offering price, the
names of any such agent, dealer or underwriter, and any applicable commission or
discount with respect to a particular offering will be set forth in an
accompanying prospectus supplement.
We have agreed to bear certain expenses of registration of the common stock
under the federal and state securities laws and of any offering and sale
hereunder not including certain expenses, such as commissions of dealers or
agents, and fees attributable to the sale of the shares.
The Agreement provides that we will indemnify the selling shareholders against
certain liabilities, including liabilities under the Securities Act.
We may suspend the use of this prospectus for a discrete period of time, not
exceeding 60 days, if, in the good faith determination of our board of
directors, Pinnacle possesses material non-public information the disclosure of
which at that point in time in Pinnacle's reasonable judgment would have a
material adverse effect on Pinnacle and its subsidiaries. We may not exercise
this delay right more than once. We are obligated in the event of such
suspension to increase the time period for which such Registration Statement is
effective for a period equal to the lesser of: (i) such suspension period plus
any period for which the effectiveness of the Registration Statement shall be
extended pursuant to the Agreement or (ii) the period prior to which the shares
registered hereunder are eligible for sale pursuant to Rule 144(k). This
offering will terminate on the first anniversary of the effective date of the
acquisition of Avid Sports, Inc. by Pinnacle.
Any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this prospectus.
There can be no assurance that the selling shareholders will sell any or all of
the shares of Pinnacle common stock offered by them hereunder.
EXPERTS
The consolidated financial statements and schedule of Pinnacle as of June 30,
2000 and 1999 and for each of the years in the three-year period ended June 30,
2000 have been incorporated by reference in this prospectus and in the
Registration Statement, in reliance upon the reports of KPMG LLP, independent
certified public accountants, incorporated by reference herein and upon the
authority of said firm as experts in accounting and auditing.
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<PAGE>
Brown, Rudnick, Freed and Gesmer, in issuing its opinion hereunder, has relied
upon an opinion of Wilson Sonsini Goodrich and Rosati, dated June 30, 2000.
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been passed upon
for Pinnacle by Brown, Rudnick, Freed & Gesmer, Professional Corporation,
Boston, Massachusetts.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, payable by Pinnacle in
connection with the sale of common stock being registered. All amounts are
estimates except the SEC registration fee and Nasdaq National Market listing
fee.
Amount
To be paid
SEC registration fee.......................... $1,904.59
Nasdaq National market listing fee............ $9,442.13
Legal fees and expenses....................... $15,000.00*
Accounting fees and expenses.................. $10,000.00*
Miscellaneous expenses........................ $3,653.28*
----------
Total......................................... $40,000.00
==========
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 204(a) of the California General Corporation Law, the
Registrant's Articles of Incorporation eliminate a director's personal liability
for monetary damages to the Registrant and its shareholders arising from a
breach or alleged breach of the director's fiduciary duty, except for liability
arising under Sections 310 and 316 of the California General Corporation Law or
liability for (i) acts or omissions that involve intentional misconduct or
knowing and culpable violation of law, (ii) acts or omissions that a director
believes to be contrary to the best interests of the Registrant or its
shareholders or that involve the absence of good faith on the part of the
director, (iii) any transaction from which a director derived an improper
personal benefit, (iv) acts or omissions that show a reckless disregard for the
director's duty to the Registrant or its shareholders in circumstances in which
the director was aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the Registrant or
its shareholders, (v) acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
Registrant or its shareholders, (vi) interested transactions between the
corporation and a director in which a director has a material financial
interest, and (vii) liability for improper distributions, loans or guarantees.
This provision does not eliminate the directors' duty of care, and in
appropriate circumstances equitable remedies such as an injunction or other
forms of non-monetary relief would remain available under California law.
Sections 204(a) and 317 of the California General Corporation Law authorize a
corporation to indemnify its directors, officers, employees and other agents in
terms sufficiently broad to permit indemnification (including reimbursement for
expenses) under certain circumstances for liabilities arising under the
Securities Act. The Registrant's Articles of Incorporation and Bylaws contain
provisions covering indemnification to the maximum extent permitted by the
California General Corporation Law of corporate directors, officers and other
agents against certain liabilities and expenses incurred as a result of
proceedings involving such persons in their capacities as
15
<PAGE>
directors, officers employees or agents, including proceedings under the
Securities Act or the Securities Exchange Act of 1934. Pinnacle has entered into
Indemnification Agreements with its directors and executive officers.
The Agreement entered into between Pinnacle and the selling shareholders in
connection with the acquisition of Avid Sports, Inc. by Pinnacle provides that
Pinnacle will indemnify the selling shareholders against certain liabilities,
including liabilities under the Securities Act.
On July 18, 2000, a lawsuit entitled Jiminez v. Pinnacle Systems, Inc., et al.,
No. 00-CV-2596 was filed in the United States District Court for the Northern
District of California against Pinnacle and certain officer and director
defendants. The action is a putative class action and alleges that defendants
violated the federal securities laws by making false and misleading statements
concerning Pinnacle's business prospects during an alleged class period of April
18, 2000 through July 10, 2000. The complaint does not specify damages. We have
publicly announced that we intend to defend the case vigorously. It is possible
that the officer and director defendants named in this lawsuit may seek
indemnification from Pinnacle with respect to this claim.
ITEM 16. EXHIBITS
Exhibit No. Description
----------- -----------
2.1* Stock Acquisition and Exchange Agreement dated as of June
29, 2000, by and among Pinnacle Systems, Inc., Avid Sports,
Inc., Brendan Corp., the Stockholders of Avid Sports, Inc.,
and David Grandin as Stockholders' Representative.
5.1** Opinion of Brown, Rudnick, Freed & Gesmer.
23.1 Consent of KPMG LLP, independent certified public
accountants.
23.2** Consent of Brown, Rudnick, Freed & Gesmer (included in
Exhibit 5.1)
23.3** Consent of Wilson, Sonsini, Goodrich & Rosati.
24.1** Power of Attorney (included in the signature page to this
Registration Statement).
* Previously filed on our Form 8-K Current Report filed on July 14, 2000 as
Exhibit 2.1.
** Previously filed.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; provided,
however, that paragraphs (a) and (b) above do not apply if the information
required to be included in a post-effective
16
<PAGE>
amendment by those paragraphs is contained in periodic reports filed by Pinnacle
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act, (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement No. 333-42776 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Mountain
View, State of California, on the 20th day of November, 2000.
PINNACLE SYSTEMS, INC.
By: /s/ Mark. L. Sanders
------------------------
Mark L. Sanders
President and Chief Executive Officer
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement No. 333-42776 has been signed by
the following persons in the capacities and on the dates indicated:
<CAPTION>
Signature Title Date
<S> <C> <C>
Mark L. Sanders* President, Chief Executive Officer and November 20, 2000
------------------------------ Director (Principal Executive Officer)
(Mark L. Sanders)
/s/ Arthur D. Chadwick Vice President, Finance and November 20, 2000
------------------------------ Administration and Chief Financial
(Arthur D. Chadwick) Officer (Principal Financial and
Accounting Officer)
Ajay Chopra* Chairman of the Board and Vice November 20, 2000
------------------------------ President, General Manager, Desktop
(Ajay Chopra) Products
Glenn E. Penisten* Director November 20, 2000
------------------------------
(Glenn E. Penisten)
Charles J. Vaughan* Director November 20, 2000
------------------------------
(Charles J. Vaughan)
John Lewis* Director November 20, 2000
------------------------------
(John Lewis)
L. Gregory Ballard* Director November 20, 2000
------------------------------
(L. Gregory Ballard)
L. William Krause* Director November 20, 2000
------------------------------
(L. William Krause)
* By: /s/ Arthur D. Chadwick (Attorney in Fact)
----------------------------
</TABLE>
18
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1* Stock Acquisition and Exchange Agreement dated as of June
29, 2000, by and among Pinnacle Systems, Inc., Avid Sports,
Inc., Brendan Corp., David Grandin as Stockholders'
Reresentative and the Stockholders of Avid Sports, Inc.
5.1** Opinion of Brown, Rudnick, Freed & Gesmer.
23.1 Consent of KPMG LLP, independent certified public
accountants.
23.2** Consent of Brown, Rudnick, Freed & Gesmer (included in
Exhibit 5.1).
23.3** Consent of Wilson Sonsini Goodrich & Rosati
24.1** Power of Attorney (included in the signature page to this
Registration Statement).
* Previously filed on our Form 8-K Current Report filed on July 14, 2000 as
Exhibit 2.1.
** Previously filed.
19
