A hydroxy functional epoxy-polyester graft copolymer and solvent-based thermosetting coating composition comprising said copolymer and polyfunctional, hydroxy-reactive crosslinking agent. The coating composition may be formulated as hot sprayable, high solids coating composition suitable for use as chip resistant automotive vehicle primer suitable for use on body panel areas subject to chipping by stones, gravel and other road debris. The composition also may be formulated as a high solids composition sprayable with conventional spraying equipment. The hydroxy functional epoxy-polyester graft copolymer is the product of polymerization of lactone monomers in presence of hydroxy functional epoxy ester resin precursor. The precursor resin is the product of modified diepoxide and hydroxy functional secondary amine, the modified diepoxide being the product of the polymerization of lactone monomers in the presence of diepoxide which has been chain extended with dicarboxylic acid.