Everything breaks, especially the objects that take the greatest beating in an adventure...armor. Whenever an enemy creature scores a critical hit, as a reaction you may choose to sacrifice your armor to bear the brunt of the hit. Doing so cancels out the additional damage at the cost of a -1 penalty to AC for each damage source negated (weapon, magical, poison, smite, etc.)
Once the armor loses all of its bonuses it is completely destroyed and is unusable. This option cannot be used against a sneak attack. Magical armor can ignore one critical damage source per magical armor bonus.