Armor, much like weapons, can be customized by changing the material components which the armor is made up of. Unlike weapons however armor has fewer attachments which can be used to benefit it. Armors made from stronger materials increase Armor Bonus but tend to increase Armor Penalty and decrease Dexterity to Reflex Defense, and armor made from lighter materials tends to do the opposite.
Armor (except for Leather, Hide, the Wooden Shield, and the Steel Shield) use iron. Leather and Hide use leather, the wooden shield uses wood, and the steel shield uses steel. Because of this, the bonus is not granted to these armors, and is only gained when a armor's material changes to iron. Armors which were originally iron and changed from another material and back to iron don't gain the bonuses as an iron set of armor.
These penalties can only reduce a set of armor to 0 Armor Bonus, 0 Dexterity to Reflex Defense, and 0 weight or effectively "weightless".
When a penalty is added to Armor Penalty, this reduces the armor's Armor Penalty, to a minimum of 0. (Example: Leather has an Armor Penalty -6, which would bring a Fullplate all the way to 0 Armor Penalty).
The following pieces of armor have restrictions on what materials can be used on them, and they go as follows:
Powered Battle Armor cannot be made of Bone, Leather, Wood, Copper, or Bronze.
Stoneplate cannot be made of any of the materials listed except Uru and Carbonadium.
Heavy Powered Battle Armor cannot be made of Bone, Leather, Wood, Copper, or Bronze.