Pole placement to create a full-state feedback controller?
As directed by @TimWescott's helpful comments, I am taking K to be the eigenvalues of the system with feedback.

The closed loop dynamics are dictated by \$A_cl = A -BK\$ and not \$K\$.

Therefore one should proceed further:

Acl = A - B*K;
e = eig(Acl)


Result:

e =

  -0.4240 + 1.2630i
  -0.4240 - 1.2630i
  -0.6260 + 0.4141i
  -0.6260 - 0.4141i


The closed loop system in ss form for this case(D=0) is:

\$ẋ = (A-BK)x + Bu\$

Plotting response to a step input: 

[n,d] = ss2tf(Acl,B,C,D)

n =

         0         0         0   -0.0020    2.0000


d =

    1.0000    2.1000    3.4000    2.7000    0.9999




Even though I set the final value on Simulink to 1 the output settles at 2. Will need to investigate why this happens.