You are correct Larry,

I read part of Robert's post wrong which led me to this scenario.

Starting bid is $9.99, I bid $10.75 the current bid is $9.99. You bid $10.49 which is the minimum you can bid. At this point the current bid $10.75 and you know that my max is $10.75 and I know that you know as well because you could not have bid $10.25.

This rule would be properly expressed as Anytime your bid is less than 1 full bid increment over the previous minimum bid both bidders will know that the high bidder is at his maximum proxy bid.