When warmed up, in third or fourth gear, above about 45 mph, the Engine Computer turns on the solenoid to open a valve so transmission fluid under pressure goes into a special port in the torque converter to apply the lockup clutch. That reduces engine speed by about 200 rpm for better gas mileage, and reduces the amount of heat generated in the transmission. Chrysler pioneered the lockup clutch, among a lot of other things, and first used it in 1977 with their big block engines, and in '78 with the small block and six-cylinder engines. Those were hydraulically controlled but functioned the same way.