ALTDEV ALT OVERSHOT IN CLB.

Narrative

WE DEPARTED EWR; RWY 4L; AT APPROX XA25 PM FLYING THE NEWARK 4 DEP SID WHICH DICTATES AN IMMEDIATE R TURN TO 060 DEGS TILL REACHING 4 DME FROM EWR AND THEN A L TURN TO 290 DEGS AND TO MAINTAIN 2500 FT. WE DEPARTED RIGHT BEHIND A B737 THAT HAD BARELY LIFTED OFF BEFORE WE STARTED ROLLING DOWN THE RWY. BECAUSE WE WERE SO CLOSE TO THE B737 WE USED FULL TKOF PWR INSTEAD OF REDUCED PWR THAT WE NORMALLY USE. I; THE CAPT; WAS FLYING AND DURING CLBOUT MY ATTN TO OUR ALT WAS DIVERTED AS I TRIED TO KEEP THE B737 IN SIGHT AND CONTINUE OUR CLB SO THAT WE WOULD STAY ABOVE HIS FLT PATH AND OUT OF HIS WAKE TURB. OUR RATE OF CLB WAS ABOUT 2300 FPM. MY FO; KEEPING THE B737 IN SIGHT AND LOOKING FOR OTHER TFC; ALSO 'FORGOT' ABOUT THE ALT. SUDDENLY SHE ASKED ME; 'AREN'T WE SUPPOSED TO LEVEL OFF AT 2500 FT?' (OUR ALTIMETER NOW SHOWED 3000 FT.) IMMEDIATELY REALIZING OUR MISTAKE; I PULLED THE PWR BACK TO FLT IDLE AND STARTED A RAPID DSCNT. DSNDING THROUGH 2800 FT; STILL NOT 4 DME FROM EWR ARPT; THE CTLR TOLD US TO TURN L TO 290 DEGS AND CLB TO; I BELIEVE; 7000 FT. THE CTLR; BEING VERY NICE TO US; DID NOT SAY ANYTHING ABOUT THE ALTDEV. THIS INCIDENT WAS CAUSED BY BOTH CREW MEMBERS BEING DISTRACTED BY AN AIRPLANE DEPARTING AHEAD. THE CONTRIBUTING FACTOR WAS OUR ALT ALERTER WHICH WAS THE OLD MODEL THAT WE HAVE ON SOME OF OUR AIRPLANES. THE ALERT SIGNAL; WARNING THE CREW 1000 FT PRIOR TO REACHING SET ALT AND WHEN REACHING SET ALT; COULD HARDLY BE HEARD. THIS WAS PARTICULARLY TRUE DUE TO THE FULL TKOF PWR AND BUSY DEP FREQ ON WHICH WE WERE OPERATING. ONCE AGAIN; THIS SHOWS HOW IMPORTANT ALT AWARENESS IS. I WILL KEEP THIS IN MEMORY AS A REMINDER AND HOPEFULLY NOT EXCEED MY STATED ALT AGAIN. PLEASE NOTE: ALTHOUGH THE B737 IS NOT A HVY AIRPLANE; ITS WAKE USUALLY AFFECTS OUR AIRPLANE QUITE A BIT. THIS IS WHY BOTH CREW MEMBERS WERE SO CONCERNED ABOUT THE POSITIONING OF THE B737 IN RELATION TO OUR ACFT. SUPPLEMENTAL INFO FROM ACN 313941: I WAS MOMENTARILY OFF RADIO #1 AND WHEN I RETURNED I NOTICED THE ALT ALERTER WAS STILL ON 2500 FT BUT WE WERE QUICKLY APCHING 4500 FT IN A 1000 FPM CLB. I ASSUMED WE HAD BEEN CLRED HIGHER BUT UPON QUESTIONING THE CAPT WE REALIZED OUR MISTAKE AND QUICKLY RETARDED OUR CLB AND DSNDED BACK TO THE ASSIGNED ALT. I BLAME MYSELF FOR THIS INCIDENT. HAD I NOT BEEN WORRIED ABOUT CALLING COMPANY WITH OUR OFF TIMES (ESPECIALLY AFTER A LONG TAXI) I COULD HAVE PREVENTED THIS ALT BUST. LESSON LEARNED: NEVER MAKE NON ESSENTIAL RADIO CALLS IN CONGESTED AIRSPACE; EVEN IF IT WILL ONLY TAKE A FEW MOMENTS -- IT'S BETTER TO WAIT.