Procmail not receiving $1 from sendmail?

Greetings again,

I've just managed to get procmail working from the command line to deliver
mail to various mailspooldirs based on destination domain and hash them
etc... but cannot seem to get it working from within sendmail:

Basically, I can't get sendmail to pass the destination domain to procmail
as an argument... I've got this in sendmail.cf:

Mlocal,         P=/usr/bin/procmail, F=lsDFMA5:/|@qSPfhn9, S=10/30,
R=20/40,
                T=DNS/RFC822/X-Unix,
                A=procmail -m /etc/procmailrc $u $h

and am trying to match on $1 and $2 in my procmailrc file... it works fine
on the command line, but through sendmail - it won't define $h for some
strange reason.. do you have any ideas?

thanks a lot!

//umar.