Understanding button movement

[ForceRs]

Hi.

I am wondering what the rules are for button placement in Texas Holdem.

I know the basics -- it moves around the table clockwise, etc.

Where I'm confused is when someone goes all-in and loses. The button seems to be placed on an empty seat sometimes.

Exact scenerio for a single table tournament:

10 player table. Seat 1 is upper right, seat 2 next position to right, etc. (essentially, hands of clock to 10).

Seats 1 thru 4 are occupied.
Seat 5 is empty.
Seat 6 is occupied and is on the button (i.e., is the dealer).
Seats 7 thru 10 are occupied.
Seat 7 goes all-in and seat 8 calls.
Seat 8 wins, knocking seat 7 out.
A new hand is dealt, but the button sits on the EMPTY seat 7. Why is this? What are the exact rules for this situation?

Thanks.

[Dave B]

House rules-they vary for tourney vs ring games and from place to place.