Ownership Participation situation

[buckaroo]

Here’s the situation. I have a client with a 401(k) plan who was owned by a few doctors a number of years ago. A few years into the business, each doctor decided to start his own PC and each PC would own the portion of the client entity. All three doctors adopted the client entity’s 401(k) plan. In 2003, one of the partner/doctors (PC owner) decided that he was going to retire. He did so for three months. At the end of the three months, he was hired as an employee of the client entity. My questions are as follows:

1) Does he have to satisfy the eligibility requirements (from scratch) of the plan as an employee?

2) If not, does he come in immediately as a participant using his past service in his own PC?

3) If he made over 90,000 combined in 2003, but only 50,000 as an employee, is he considered an HCE for 2004?

4) For top heavy purposes, is he considered a former key employee going forward?