PREHEAT oven to 350° F. Grease and flour 10-cup Bundt pan.
MELT morsels in medium, uncovered, microwave-safe bowl on MEDIUM-HIGH (70%) power for 1 minute; STIR. Morsels may retain some of their original shape. If necessary, microwave at additional 10 to 15-second intervals, stirring just until morsels are melted. Cool slightly.
COMBINE flour, baking powder and salt in small bowl. Beat butter, sugar and vanilla extract in large mixer bowl until creamy. Beat in eggs, one at a time, beating well after each addition. Beat in lemon peel and melted morsels. Gradually beat in flour mixture alternately with buttermilk. Pour into prepared Bundt pan.
BAKE for 50 to 55 minutes or until wooden pick inserted in cake comes out clean. Cool in pan on wire rack for 10 minutes. Combine powdered sugar and lemon juice in small bowl. Make holes in cake with wooden pick; pour half of lemon glaze over cake. Let stand for 5 minutes. Invert onto plate. Make holes in top of cake; pour remaining glaze over cake. Cool completely before serving.