It's under "Encoder" dropdown. If you don't have it you might need to set OBS to run on your integrated graphics, but I won't get into that right now, since that can cause a lot of other issues on laptops.
More importantly, here are some other issues (or just preferences) i think might matter:
1. You're saving to mp4 and not mkv. if you save to mp4 and you crash, then you lose all of your recording. you can chooke mkv and then use the remux option under file -> remux recordings to get mp4. this way, you can have mp4 files but if you crash you can still recover the recording.
2. your bitrate is very high. 40,000 bitrate is a lot, and it's probably easier to just use CRF which controls bitrate for you. A lower CRF value will increase quality, with a good starting point being around 20.
if you still get lag, you can try to lower your cpu usage preset to superfast or ultrafast.