The answer to this may be so obvious that I'll feel stupid but that hasn't stopped me in life so far...

How do you format a character that is reading something out loud, then breaks from it to say something, then goes right back to reading again in the same line of dialogue?

For instance:

ED
(reading) Dear Ed, enclosed with this letter is a contract to write a script for our company. (now not reading) Then there's a bunch of legal jargon. Sheesh, it goes on and on. Wait, here's the good part. (reading) You will be paid in Slurpees not limited to any flavor and up to five per week!

Does parentheticals string the whole thing together. It didn't look right and what goes in the "not reading" part?

Or is doing that all a really bad idea and I should have someone interrupt the character to break it up?

I used parentheticals for something similar in Isolde.

BATMAN
And now, a reading from "I Whip My Hair Back and Forth" by Willow Smith.  Ahem.
(reading)
I whip my hair back and forth, I whip my hair back and forth.
(stops)
Thank you.

Thanks Gage...I definitely did not have that correct.

And thanks for using Batman!

Although Gage's suggestion is practical and would definitely work, I think I would tackle it a little differently...

Instead of wasting space with parentheticals, I'd consider using quotation marks instead... Something like this...

                                ED
          "Dear Ed, enclosed with this letter
           is a contract to write a script for our
           company." Then there's a bunch of
           legal jargon... "You will be paid
           in slurpees not limited to any
           flavour and up to five per week.

- Hope that helps. If not, go with Gage.

Quoted from CrusaderVoice You will be paid in Slurpees not limited to any flavor and up to five per week!

I got an offer like that once. It seemed pretty cool at the time, until I got the first shipment... The bastards melted on the way over...

Cheers

Dan