Armor determines the mitigated portion of any received physical damage and is split into three separate modifiers, one for each physical damage type: Slash, Pierce, and Crush. Armor is expressed by a value that ranges between -2000 and +2000, which is in turn converted to a -85% and +85% modifier by a non-linear formula. Armor mostly comes from equipment.
The value of 350 is the Armor needed to reduce any incoming physical damage by 50%.
It's not possible to reach 100% damage reduction for physical damage.