How are energy and mass connected during the formation of an atom

Energy is absorbed, so the mass is increased.
Energy is released, so the mass is increased.
Energy is absorbed, so the mass is reduced.
Energy is released, so the mass is reduced. 
Energy is absorbed, so the mass is increased

they are connected by e =mc2,  where e is the energy, m is the mass and c is speed of light , a mass m  from the atom must be converted to energy to hold the nucleons together, the mass is termed as mass defects , the energy is termed as binding energy. in technical terms , a mass m must be converted to energy E  called binding energy for  nuclei of atoms.

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