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It is treated as if he is cut. He, in this case his family, will get the guaranteed money he was due.
This is similar to the raiders situation several years ago, but in that instance Al Davis refused to pay up until he was ordered to by the league I believe. A real stand up guy.
Yes, it will count against the cap. I assume this means that since he has been paid the annual salary for this season, that he $ will be whatever the remaining amounts of the prorated signing bonus is will count against the cap.
Cap wise, no different than if cut. So, if someone where to sign an $80mm contract with $40mm guaranteed -- and got killed the next day -- that team is on the cap hook for $40mm.
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