awk splits a text file into "records". by default this is a line (but can be changed).
each line (or record) is split into fields. by default this is done at spaces.
$0 then refers to the entire line at the moment. $1 is the first word, $2 the second, and so on, up to $NF (NF meaning number of fields)
The exit in the action block makes it quit before it ever gets to any other lines.