Cream butter; gradually add sugar, beating well. Add eggs, one at a time, beating well after each addition.
Combine flour, cracker crumbs, and baking powder; add to creamed mixture alternately with milk, beginning and ending with flour mixture. Mix well after each addition. Stir in lemon extract and chopped pecans.
Pour batter into 2 greased and floured 8-inch round cake pans. Bake at 350° for 25 minutes or until a wooden pick inserted in center comes out clean. Cool in pans 10 minutes; remove layers from pans, and let cool completely. Spoon Lemon Glaze between layers and over top of cake. Garnish with lemon slices.