How to setup a group calendar on a 2010 exchange server?

You should be able to set it up from outlook - under public folders, add new with calendar items.  Right click and edit the properties of the new calendar and set the appropriate permissions.

I don't have public folder as a choice. Does it have to be setup?

If you are in outlook, there is a folder icon at the bottom on the left side that will "show all folders"  if you truly have not setup the public folders on the server - follow this link:

http://technet.microsoft.com/en-us/library/bb691104.aspx

So far so good. I have it created but it is visible to the other employees. I have only the managers name in there but I am trying to find out why everyone can see it.

In the permissions tab, you need to clean up the default and anonymous rights... you should have only the managers in the list.  If you have that and other users still see it, the question would be can they click on and view the calendar or do they only see that it exists?

do I have to make everyone an owner in order for no one else to see it?

no - you can set anonymous and default to "NONE" for the rights (that is the setting that will prevent everyone from seeing the contents).  The other users will only need to be a reviewer to see it, contributor to add and so on.

I believe all users will still see the object in the public folders, but if they are not in the list to allow access they should get an access denied message.

with that setting now they can not view it at all.

I think I am going to delete that calendar and start over. If I don't have the manager as an owner the whole calendar disappears.

Give me the rundown...  who currently has access, is it the right access and what are their permissions.  Who does not have access, is that the right access and what are their permission.  I think we are VERY close, just a matter of getting the right security.

just saw your post - that sounds like a good plan now that you are familiar with what is needed...

well got most of the problems worked out. When I changed the managers to owners under custom it would not go back to authors. I started over with a new calendar and added just a couple of managers and changed anonymous and default to none and that fixed the other users from seeing the calendar. I now have a problem that one of the managers can not "save and close" an appointment. They all have author rights. Guess this will have to wait until Monday. Thanks for the help. you got me started in the right direction.

found the problem. he had his tool bar so far over you could not see the save and close. thanks again

Gotta love it!  Glad to hear it's working.  Have a nice weekend.