The compatible processor with the Intel® Server System R1304SPOSHBNR is the model Intel® Xeon® Processor E3-1240 v6. As you mention before graphics are not embedded on the processor; however, the board comes with graphics included on the Baseboard Management Controller (BMC), the board comes with a VGA video port.
The technical product specification of the Intel® Server Board S1200SP product family gives us more details of the board.
In regard the Intel® Xeon® Processor E3-1245 v6, this processor includes graphics and it is only supported by the Intel® Server Board S1200SPLR (uATX).
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