Abstract: A multi-component composite coating composition is provided which includes a pigmented base coat and a transparent topcoat composition applied over the base coat. The transparent topcoat is deposited from a substantially solvent free film-forming composition which includes a thermosettable dispersion of polymeric microparticles having functionality adapted to react with a crosslinking agent and a hydrophilic crosslinking agent reactive with the functionality of the microparticles. The microparticles are prepared from one or more reaction products of ethylenically unsaturated monomers, one or more hydrophobic polymers and one or more hydrophobic crosslinking agents. Pigmented film-forming compositions as well as curable compositions containing the above-described dispersions also are provided. A method of forming the dispersion of polymeric microparticles is provided.