Solution

1 Select the Rounded Rectangle Tool (U) and choose the Paths option, as shown here.

Choosing the Paths option

2 Use this to create a rounded rectangle path over the image. You can view the path in the Paths palette.

Creating a rounded rectangle

3 Select Layer > Vector Mask > Current Path.

Photoshop will create a vector mask using the rounded rectangle path you just created. The example here shows the new vector mask in the Layers palette. You can use the Direct Selection Tool (4) to modify the path and change its shape.

Creating the vector mask
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