I've checked it and all seems to work as it should.
If you want a major contour at 1 then you set interval value to 1 (as you did). To get minor at every tenth you need to set minor to 9 (look in the helpfile). Minors per Major value is the number of minors between majors, 5 vill give you minors at interval 0,16 (1/6)
Tip!
For annotations you can turn off automatic annotations and use "Annotate by Fence" after executing the command. Annotate by Fence will give you the opportunity to place annotations along a crossing line at any position.
/Lars