With Book Designer you download and install v4.0, then overwrite with 5.0.
Here's some advice (and links) from our wiki:
https://wiki.mobileread.com/wiki/Book_Designer
And a long but useful thread:
https://www.mobileread.com/forums/showthread.php?t=11786
Basically, get the file into Book Designer. Set chapter headings as titles. Perhaps make a TOC. (THis can be done automatically, using the 'Insert' menu.) Then click on make Sony Reader file.