The Collaborative International Dictionary of English v.0.48:

Cut-out \Cut"-out`\ (k[u^]t"out`), n.
   (a)

   1. (Telegraphy) A species of switch for changing the current
      from one circuit to another, or for shortening a circuit.
      (b) (Elec.) A device for breaking or separating a portion
          of circuit.
          [1913 Webster]

   2. Something cut out from another object, especially a piece
      of thick paper or cardboard with a picture on it (as of a
      person or other object), embedded in a larger sheet of
      paper and having perforations around the edges of the
      figure to allow easy removal from the larger sheet.
      [PJC]

   3. A valve in the exhaust system of an internal combustion
      engine which, when activated, permits the exhaust gases to
      bypass the muffler.
      [PJC]