。
She gave him a watch.
Literal
She [topic-は] him [to-に] watch [object-を] gave.
やる as a giving verb (rather than the auxiliary ~てやる) — used here for giving an item to someone of equal/lower status, or in casual contexts. Slightly rougher than あげる; would not be used in formal speech. 時計 ('clock, watch') is one of the words that's the same for both — context (whether worn on a wrist or hung on a wall) disambiguates.