Windows – How to replace permissions and everything inside with icacls on Windows Server 2012

Using Windows Server 2012 R2 AND Windows Server 2008 R2.

I have a folder called C:\temp\test and I want to grant access to SYSTEM and a user and all files and subdirectories, and remove everthing else. I've tried this command but all the existing permissions remain:

Existing permissions are:

Access : NT AUTHORITY\SYSTEM Allow  FullControl
         BUILTIN\Administrators Allow  FullControl
         BUILTIN\Users Allow  ReadAndExecute, Synchronize
         BUILTIN\Users Allow  AppendData
         BUILTIN\Users Allow  CreateFiles
         CREATOR OWNER Allow  268435456

I want to remove all ACLs except SYSTEM, and add <DOMAIN>\<USER>

I tried this command:

icacls c:\temp\test /grant:r <DOMAIN>\<USER>:(OI)(CI)F /t

processed file: c:\temp\test
Successfully processed 1 files; Failed processing 0 files

When I look at the permissions afterwards, the <DOMAIN>\<USER> has the correct permissions but all the others remain. I thought /grant:r replaced all the permissions? Do you know what command I need to run to remove all the other permissions?