If a participant owns company stock inside the plan greater than 5% of the total stock out there, is that participant considered to be a 5% owner? He does not own more than 5% of the stock outside the plan.

Depends why you need to know.

If you are determining HCEs or Keys or whether or not an affiliated service group exists [attribution defined under IRC §318] the answer is no.

If you are determining whether the participant is a disqualified person for purposes of the prohibited allocation rules under IRC §409(p) [attribution also defined in IRC §318, but slightly modified] the answer is yes.

If you are determining whether or not a controlled group of businesses exists [attribution defined under IRC §1563] the answer is also yes.

What do you mean by "out there" ?

To me "out there" means issued stock. and "outside the plan" means nothing relevant.

How is the stock held ? In participant's name ? ESOP?

I must be missing something. Are ASG and controlled group etc issues of concern to you ? I see nothing in the post that suggests that there is any other entity involved.