You can't fire her fast enough. Keeping her does you, and she, no favours.
At this point its a financial question.
Performance her out - big headache, no cost
Buy her out - no headache, big cost
If you want to help her and still have some respect for her, sit her down and tell her she's obviously not happy, she needs to tell you what would make her happy, or ask for your help finding another job. Make your decision on the above first though. You're committed either way.
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