Each team member picks one class (or a set of related classes) from the project and refactors it. Make sure that no two team members choose the same classes.
Turn in the code before the refactoring, the code after the refactoring, unit test cases that ensure the refactored code is correct, and a discussion of what individual refactorings were performed, and how they improved the design of the code. The refactored code must be well-designed, clean and readable. Keep in mind that refactoring may not change the behavior of the code.