Multiple Filters for Databases on SQL Server Server Level Audit
Try this, which slightly modifies your WHERE clause to correctly follow the SQL Server operator precedence rules:

CREATE SERVER AUDIT [PCIAudit]
TO FILE
(   FILEPATH = N'D:\SQLAuditLogs\'
    , MAXSIZE = 2048 MB
    , RESERVE_DISK_SPACE = OFF
)
WITH
(   QUEUE_DELAY = 0
    , ON_FAILURE = CONTINUE
)
WHERE ([database_name] = 'DataBase1' OR [database_name] = 'DataBase2') 
    AND [server_principal_id] &lt;&gt; 277 
    AND [server_principal_id] &lt;&gt; 278 
    AND NOT [statement] LIKE 'ALTER INDEX%REBUILD%' 
    AND NOT [statement] LIKE 'ALTER INDEX%REORGANIZE%';
GO

ALTER SERVER AUDIT [PCIAudit]
WITH (STATE = ON);
GO


Notice the round brackets ( and ) in this:  ([database_name] = 'DataBase1' OR [database_name] = 'DataBase2') - they tell the where clause to allow either DataBase1 or Database2.  As you have it, the where clause is set to allow either DataBase1 or Database2+server_principal_id&lt;>277.