...as the ADR get lower (and damage absorption rolls started failing), the armor would continue absorbing damage at a declining rate.
40 ADR would have SR of 4, 30 ADR would have SR of 3, etc.
Basically you won't end up like the character John mentioned earlier:
John wrote on Nov 18
th, 2010 at 4:30pm:
...but you know how many NPC's or players were beaten bloody with 55 adr left? In most of the fights, half of the armor really didn't come into play. I feel this is a good compromise.
...which is why he had his own house rule about the armor.
If a less powerful alternative is sought, how about this:
Character uses 1 action and saves vs Agl to block an attack with armor. Normal PR costs would apply, but the character would not receive an evasion bonus.
The whole "ADR" thing can be justified this way: when a character has taken enough damage to bring their ADR down 50% (ie: 100 ADR taken down to 50) then the armor is only undamaged on the lower portion of their body. This makes it harder to take damage from "typical" attacks that are aimed at the upper body.
That seems like the thought process behind ADR...