#Short Answer
Replace `if( r.getColumn() != 5 )` by `if( r.getColumn() != 5 && r.getRow() != 1 )` .

#Long answer

`&&` is the AND operator `r.getRow() != 1` compares the row of the edited cell with the row number that you want to be skipped. 

##Full code minimal modification

    function onEdit() {
      var s = SpreadsheetApp.getActiveSheet();
      var r = s.getActiveCell();  
      if( r.getColumn() != 5 && r.getRow() != 1) { //checks the column
        var row = r.getRow();
        var time = new Date();
        time = Utilities.formatDate(time, "GMT-07:00", "MM-dd-yyyy HH:mm:ss");
        SpreadsheetApp.getActiveSheet().getRange("E" + row.toString()).setValue(time);
      };
    };

##Full code improved

Taking advantage that onEdit() event gets an event object that include the range.

    function onEdit(e) {
      var r = e.range;  
      if( r.getColumn() != 5 && r.getRow() != 1) { //checks the column
        var row = r.getRow();
        var time = new Date();
        time = Utilities.formatDate(time, "GMT-07:00", "MM-dd-yyyy HH:mm:ss");
        SpreadsheetApp.getActiveSheet().getRange("E" + row.toString()).setValue(time);
      };
    };

#References

- [Logical Operators - Mozilla Developer Network](https://developer.mozilla.org/en-US/docs/Web/JavaScript/Reference/Operators/Logical_Operators)  
- [JavaScript Comparison and Logical Operators - w3schools.com](http://www.w3schools.com/js/js_comparisons.asp)