Open picture file. This will be the background layer. Access the Rounded rectangle tool. It is nested in a slot in the shape selection tool - press U a couple of times to get to it. Set the radius to 60-80, and drag out the rectangle. This will generate a new layer.

The Rounded Rectangle tool allows you to draw squares and rectangles with rounded corners. Click the Rounded Rectangle tool. Drag to draw a rounded rectangle. To constrain proportions and create a square, press and hold Shift while you drag. Drag any of the corner handles within the shape to make them more or less rounded.