Cancel all outstanding options. They are way too out of the money to be effective. Grant new options say at $1 to reward management and members of the board for hanging in there. They need to make some money, they have already lost too much on the stock.
I am convinced you are David Nichols posting as someone else. Here is my 5-Point Plan for fixing K-Swiss:
1) Fire David Nichols immediately. Send the message nepotism and inept management will no longer be tolerated.
2) Steven Nichols step down. Send the message that the tired old guard is gone.
3) Freeze all bank accounts then fire George Powlick.
4) Sell the company to the highest bidder.
5) Turn off the lights.