Step three:

Grab the eraser tool with a hard tip, small is better to work with.

Randomly erase the edges of the rectangle, we want to make it look some what crumble and random so make sure each erase is different than the rest. Remember to not over do when erasing, we just want the rectangle to not look like a perfect rectangle.

Step four:

Go to Select > Load selecttion > Default to select the entire piece.

Create a new layer.

While the entire piece is selected go to Select > Modify > Contract > 5 px.

Now add a 1 #00000 stroke by going to Edit > Stroke > Location: Inside.

Set the opacity level 21%.